• Specific Year
    Any

Editors --- "Cubillo and Gunner v Commonwealth of Australia - Case Summary" [2001] AUIndigLawRpr 36; (2001) 6(3) Australian Indigenous Law Reporter 61

Court and Tribunal Decisions - Australia

Cubillo and Gunner v Commonwealth of Australia

Federal Court of Australia (Sackville, Weinberg and Hely JJ)

31 August 2001

[2001] FCA 1213

Removal of Aboriginal children — Aboriginals Ordinance 1918 (NT) — Welfare Ordinance 1953 (NT) — wrongful imprisonment — duty of care — fiduciary duty — reformulated argument impermissible on appeal — extension of time — laches

Facts

Lorna Cubillo (‘Mrs Cubillo’) was born in 1938. In about 1942 Mrs Cubillo was moved to Six Mile Creek, a ration depot established by the Aborigines Inland Mission of Australia (AIM). In 1945, Mrs Cubillo was relocated to Phillip Creek Settlement. In 1947, together with a group of part-Aboriginal children, she was taken to the Retta Dixon Home, set up by the AIM as a home for part-Aboriginal children. She remained there until she was aged 18.

Peter Gunner (‘Mr Gunner’), born in 1948, grew up on the Aboriginal community at Utopia Station in the care of his mother. In 1955 he was placed in St Mary’s Hostel, run by the Australian Board of Missions (ABM), where he remained until 1963.

In the case before the judge at first instance, both applicants alleged they had been removed from their families and detained in institutions against their will. They alleged that the Commonwealth had been responsible for taking them into custody and detaining them. They each relied on four causes of action to support their claims for damages: wrongful imprisonment and deprivation of liberty; breach of statutory duty allegedly owed to them by the Director of Native Affairs, in failing to provide for their custody, maintenance and education, for which breach the Commonwealth was said to be vicariously responsible; a breach of duty allegedly owed to them by the Commonwealth, and a breach of the Commonwealth’s fiduciary duties.

The trial judge held that:

(a) No vicarious liability attached to the Commonwealth as a result of either applicant being removed in accordance with s 6 of the Aboriginals Ordinance 1918 (NT) — even if the Directors were in breach of a statutory duty, no liability attached to the Commonwealth;

(b) Section 16 of the Aboriginals Ordinance 1918 (NT) provided total protection from the applicants’ claims of wrongful imprisonment;

(c) There was no liability for breach of statutory duty under the Ordinances;

(d) Neither the Commonwealth nor the Directors owed the applicants a duty of care. Even if such duty existed, except in the case of the Director of St Mary’s there was no breach of such duty; and

(e) No fiduciary relationship existed between the applicants and the Commonwealth, and if any such relationship existed there was no breach of that duty.

The application for extension of time was refused on the basis that it would cause unreasonable delay and prejudice to the respondents.

On the appeal, the issues were narrower than those dealt with by the primary judge. In particular, the appellants did not pursue their claim for breach of statutory duty and did not challenge major factual findings made by the trial judge.

Held

1. The primary judge properly rejected the appellants’ wrongful imprisonment claims: at para [474] of the judgment.

2. On appeal, the appellants’ reformulated case (alleging that they were owed a duty of care by the Commonwealth due to its involvement in their removal, which had been carried out in a negligent manner) was rejected because it had not been raised before the primary judge: at paras [369], [386], [388], [392], [474].

3. The primary judge’s finding (NT), was upheld: at paras [445], [474].

4. The primary judge correctly held that there was no basis for the appellants’ claims founded on an alleged breach of fiduciary duties said to be owed by the Commonwealth to the appellants: at para [465]. In addition, the primary judge correctly decided that the appellants’ claim for breach of fiduciary duty was barred by the equitable defence of laches: at para [471].

Submissions by the appellants that the primary judge’s assessment of damages was too low were not addressed: at para [472].

Sackville, Weinberg and Hely JJ:

Introduction

1. On 11 August 2000, a Judge of this Court, O’Loughlin J, dismissed proceedings brought by Lorna Cubillo (‘Mrs Cubillo’) and Peter Gunner (‘Mr Gunner’) against the respondent (‘the Commonwealth’): Cubillo v The Commonwealth (No 2) [2000] FCA 1084; (2000) 103 FCR 1. The two proceedings were heard together and raised similar, although not identical, issues. Mrs Cubillo and Mr Gunner have each appealed against the judgment of the primary Judge.

...

9. The primary Judge’s reasons for dismissing the appellants’ claims were complex and detailed. His Honour made it clear, however, that he saw his task as to determine the specific allegations made by each of the appellants and not to pass judgment on the social policies that led to the removal and institutionalisation of many part-Aboriginal children...

10. ... We have therefore had no occasion to revisit the evidence which led his Honour to make findings about the policies of successive Commonwealth Governments relating to the removal of part-Aboriginal children from their families. Nothing we say should be read as indicating any view which we may have about those findings.

Course of the proceedings

The pleaded cases

...

12. The cases pleaded by Mrs Cubillo and Mr Gunner were similar. They alleged that they had been removed from their families and detained in institutions against their will. They further alleged that the Commonwealth had been responsible for taking them into custody and, thereafter for detaining them. The appellants each relied on four causes of action to support their claims for compensatory, aggravated and exemplary damages against the Commonwealth:

(i) the ‘wrongful imprisonment and deprivation of liberty’ of each of the appellants, a claim based principally but not solely on the ground that their removal and detention by the Director of Native Affairs were unlawful and beyond the powers conferred by ss 6, 7 and 16 of the Aboriginals Ordinance 1918 (NT) (Aboriginals Ordinance);

(ii) a breach of the statutory duty allegedly owed by the Director of Native Affairs to each of the appellants, in failing to provide for their custody, maintenance and education as required by s 5(1)(d) and (f) of the Aboriginals Ordinance, for which breach the Commonwealth was said to be vicariously liable;

(iii) a breach of the duty of care allegedly owed by the Commonwealth to each of the appellants (a claim put in a variety of ways, but primarily on the basis that the removal and detention of each appellant breached the Commonwealth’s ‘duty to take reasonable care’ because the Commonwealth and the Director of Native Affairs had failed to take into account the individual circumstances of each appellant, in particular the relationship with his or her family and community); and

(iv) a breach of the fiduciary duty said to be owed by the Commonwealth to each of the appellants.

13. The appellants ultimately contended that they were each entitled to be compensated for pain and suffering (including psychological injury), loss of enjoyment of life, loss of culture and of entitlements associated with being recognised as a traditional owner of traditional lands for the purposes of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (‘Land Rights Act’). The appellants also pleaded that the Commonwealth had acted with a ‘conscious and contumelious disregard for [their] welfare and rights’, thereby causing substantial distress and humiliation. This plea was said to justify a claim for aggravated and exemplary damages against the Commonwealth.

14. The defences filed on behalf of the Commonwealth included pleas that, insofar as the appellants sought damages at common law or for breach of statutory duty, their claims had been statute barred by the Limitation of Suits and Actions Act 1866 (SA) (‘1866 Act’) or the Limitation Act 1981 (NT) (‘Limitation Act’), both of which were said to apply to the proceedings by virtue of the Judiciary Act. The Commonwealth also pleaded that any claims for equitable compensation were barred either by analogy to the barring by statute of the common law claims or by the doctrine of laches.

...

The scope of the appeal

186. The issues canvassed on the appeal were very much more circumscribed than and to some extent different from those dealt with by the primary Judge. In large measure this is a consequence of the fact that the appellants did not challenge the most important findings of fact adverse to their cases. Among the findings made by the primary Judge not challenged by the appellants are these:

  • at the relevant times there was no general policy in force in the Northern Territory supporting the indiscriminate removal and detention of part-Aboriginal children, irrespective of the personal circumstances of each child;
  • the Commonwealth’s policy of removal of part-Aboriginal children, at those times, did not have the malign purposes attributed to it by the appellants;
  • Mrs Cubillo had failed to establish that, at the time of her removal, she was in the care of an adult Aboriginal person whose consent to her removal had not been obtained; and
  • Mr Gunner’s mother, Topsy Kundrilba, had given her informed consent to her son’s removal from Utopia Station to St Mary’s Hostel.

187. In addition, senior counsel for the appellants, Mr Rush QC, accepted in the course of argument on the appeal that it was open to the primary Judge to find that the Commonwealth would sustain ‘significant prejudice’ in being forced to defend proceedings instituted so many years after the relevant events occurred.

188. On the appeal ... the appellants did not seek to pursue a number of arguments advanced at trial and modified a number of others. ... The following is an outline of the major issues not in dispute on the appeal or in respect of which the appellants’ position changed between the trial and the appeal.

189. (i) On the appeal, it was common ground that the appellants’ causes of action founded on false imprisonment and breach of duty had been statute barred ... It follows that the appellants must obtain an order under s 44 of the Limitation Act extending time in which to institute proceedings if they are to succeed in establishing those causes of action.

190. (ii) The appellants not only accepted that it was open to the primary Judge to find that the Commonwealth had sustained significant prejudice in defending the proceedings, but acknowledged that his Honour correctly stated the principles governing the grant of an extension of time under s 44(1) of the Limitation Act. They maintained nonetheless that his Honour erred in the exercise of his discretion.

191. (iii) The appellants no longer pressed the claims against the Commonwealth based on an alleged breach of statutory duty by the Director of Native Affairs.

192. (iv) The appellants’ false imprisonment claims were modified on appeal. ...

...

196. (v) The appellants’ breach of duty claims were narrowed and substantially reformulated on the appeal. ...

...

199. The appellants’ reformulated submissions gave rise to a debate as to whether they had been live issues at the trial and, if not, whether the appellants should be permitted to raise them for the first time on appeal.

The false imprisonment claims

...

The primary judgment on false imprisonment

The reasoning

215. It must be said, with great respect, that it is not entirely easy to follow his Honour’s reasoning on aspects of the false imprisonment claims. ...

...

Why did the primary Judge reject the false imprisonment claims?

243. ... [W]e think that the steps in his Honour’s reasoning, leading to the conclusion that the appellants had failed to establish their claims, were as follows:

(i) On the evidence, the Director detained Mrs Cubillo and Mr Gunner when they were removed from their families and also during the periods in which they were inmates, respectively, of the Retta Dixon Home and St Mary’s Hostel.

(ii) Subject to the possible operation of the independent discretion rule, the detention in each case could be sheeted home to the Commonwealth, thereby imposing on it the burden of establishing that the detention in each case was lawfully justified. (It is not clear why his Honour regarded detention by the Director as equivalent to that of the detention by the Commonwealth. It would seem, however, that it flowed from the fact (as he found) that the Director was an officer of the Commonwealth and from an implicit finding that the detentions occurred in the course of the Director’s employment.)

(iii) It was possible that the Directors had validly exercised the statutory powers conferred by ss 6 and 16 of the Aboriginals Ordinance in relation to the detention of the appellants. It was also possible that the Director had validly exercised the powers conferred by s 17 of the Welfare Ordinance in relation to Mr Gunner. If the powers had been validly exercised, the Commonwealth could not be liable for false imprisonment, since the appellants’ detention in those circumstances would have been lawfully justified.

(iv) The onus was on the Commonwealth to establish on the balance of probabilities that the Director had validly exercised his statutory powers so as to lawfully detain the appellants. The Commonwealth had failed to discharge this burden (that is, the legal burden of proving, on the balance of probabilities, the facts necessary to demonstrate that the Directors had lawfully exercised their statutory powers).

(v) It was also possible that the Directors had purported to exercise their statutory powers in relation to Mrs Cubillo and Mr Gunner, but in a legally improper manner. (This, after all, was the principal case advanced by the appellants to support their false imprisonment claims.) If that was so, the Commonwealth could not be vicariously liable for the Directors’ detention of the appellants by reason of the independent discretion rule. To put the matter another way, the appellants would have failed to show that the source of the Directors’ authority to act was derived from their employment, as distinct from a duty imposed on the Directors by law.

(vi) For the purposes of this aspect of the case, the onus was on the appellants to prove that the Directors’ detention of the appellants was undertaken in the course of their employment. In the circumstances, this onus required the appellants to prove, on the balance of probabilities, that the Directors detained them otherwise than by actions taken in purported exercise of their statutory powers. (His Honour did not explicitly refer to the principles relating to the burden of proof, but he had addressed them in Australian Competition and Consumer Commission v Golden Sphere International Inc [1998] FCA 598; (1998) 83 FCR 424, at 449–451; see also Clayton Robard Management Ltd v Siu (1988) 6 ACLC 57 (NSWCA), at 64–65, per Kirby P.)

(vii) His Honour was not satisfied that the appellants had discharged this burden. They had therefore not negated the application of the independent discretion rule to the Directors’ detention of the appellants. It followed that the appellants had not established that the Commonwealth was vicariously liable for the appellants’ detention by the Directors.

The appellants’ primary case on false imprisonment

244. The appellants contested the primary Judge’s rejection of their primary case on false imprisonment (that is, their case other than the unlawful detention argument) on only two grounds:

  • First, they submitted that the primary Judge’s findings that the Commonwealth had not actively promoted or caused the appellants’ imprisonment were wrong and should be overturned.
  • Secondly, Mr Gunner submitted that the order made on 21 May 1956, committing him to St Mary’s Hostel, was vitiated by Wednesbury unreasonableness.

We deal with each of these contentions in turn.

The finding that the Commonwealth did not actively promote or cause the appellants’ imprisonment

Mrs Cubillo

...

246. As we have noted, the appellants did not challenge his Honour’s finding that they had established neither that there was any such policy of removal of part-Aboriginal children nor that, if there were such a policy, it had ever been implemented as a matter of course in respect of the appellants. It might have been thought that the absence of a challenge to these findings removed the foundation for Mrs Cubillo’s argument that the Commonwealth actively promoted and caused her imprisonment. Especially is this so when she did not identify any error of principle in his Honour’s reasoning on this issue.

...

250. ... The [additional] matters relied on by Mrs Cubillo fall well short of establishing that the Commonwealth actively promoted or caused Mrs Cubillo’s imprisonment, whether in furtherance of a common design with the AIM or Miss Shankelton, or otherwise. They certainly do not justify overturning his Honour’s finding to the contrary.

Mr Gunner

251. The argument advanced on behalf of Mr Gunner was very similar to Mrs Cubillo’s argument [and are rejected for similar reasons].

...

Wednesbury unreasonableness: Mr Gunner

253. The grounds on which Mr Gunner submitted that the primary Judge ought to have found that the committal order was vitiated by Wednesbury unreasonableness were these:

(a) the conditions at St Mary’s were such that no one acting reasonably could conclude that Mr Gunner’s interests could be promoted by committal to that institution;

(b) the Native Affairs Branch knew that a child of Mr Gunner’s age and background was unlikely to benefit from a standard European education; and

(c) the contemporary state of knowledge recognised that children who were institutionalised were likely to suffer harm.

254. In assessing this submission, it is necessary to bear in mind that a decision will be vitiated by Wednesbury unreasonableness, only if no decision-maker, acting reasonably, could have made that decision or if it is shown that the decision was so unreasonable that no reasonable person could have come to it. In applying this standard a court must proceed with caution lest it exceed its supervisory role by reviewing the decision on the merits: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, at 41–42, per Mason J; Attorney-General (NSW) v Quin (1990) 170 CLR 1, at 36–37, per Brennan J. It is not enough to show that another decision-maker might have reached a different result or even that the court takes the view that a different decision would have been more appropriate: Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611, at 626–627, per Gleeson CJ and McHugh J; Friends of Hinchinbrook Society Inc v Minister for Environment (No 2) (1997) 69 FCR 28, at 59–65, per Sackville J. Moreover, Mr Gunner did not challenge his Honour’s approach, which required the question of reasonableness to be assessed by reference to the standards of the time: see Kruger, at 36.

...

256 In our opinion, none of the findings made by his Honour sustains Mr Gunner’s challenge to the committal order. Nor is there any basis for our making findings that would support that challenge. The material to which we were referred merely indicated that other decision-makers at the time might have formed a different view as to whether Mr Gunner was likely to derive substantial benefits from a European education and whether the drawbacks likely to be associated with institutionalisation outweighed the advantages. ... The absence of evidence as to why the Director decided to place Mr Gunner in St Mary’s Hostel made it impossible to characterise that decision as manifestly unreasonable.

The unlawful detention argument: the commonwealth’s notice of contention

...

The finding that the director detained Mrs Cubillo

...

269. In our view, at least in the absence of further findings of fact, his Honour was in error in concluding that it was the Director who detained Mrs Cubillo from the date of her removal from the Phillip Creek Settlement on 24 July 1947 until her release from the Retta Dixon Home in 1956, whether or not in conjunction with Miss Shankelton or the AIM. The consequence is that the foundation for Mrs Cubillo’s unlawful detention argument is wanting.

...

The finding that the director detained Mr Gunner

...

274. In our view, the findings of primary facts made by the primary Judge are insufficient to support his Honour’s ultimate finding that the Director of Welfare detained Mr Gunner on or after 13 May 1957. ...

The appellants’ challenge to the rejection of the unlawful detention argument

...

287. ... [W]e reject the first challenge to the primary Judge’s conclusion that the appellants had failed to make out their unlawful detention claims. ...

...

The independent discretion rule

...

289. [In their second challenge, to the primary judge’s findings concerning the independent discretion rule, the appellants’ submissions] ... challenged neither the existence of the rule nor the primary Judge’s formulation of it. So far as the false imprisonment claim is concerned, the attack on the primary Judge’s findings was confined to a submission that his Honour was wrong to conclude that the statutory powers conferred on the Director by s 6 of the Aboriginals Ordinance and s 17 of the Welfare Ordinance, fell within the rule. ... On the proper construction of each Ordinance, and ‘from the evidence which shows the degree of Commonwealth control’, it was submitted that the statutory powers were not to be regarded as independent discretions for the purpose of the rule.

...

291. The primary Judge took the view that the direction in both Ordinances that the Director was to be ‘under the Administrator’ did not detract from the clear words of s 6 of the Aboriginals Ordinance and s 17 of the Welfare Ordinance. ...

292. In our view, his Honour’s construction of the relevant provisions is correct. ...

293. This conclusion is consistent with the reasoning of the High Court in Kruger v The Commonwealth ...

294. It follows that this challenge by the appellants to his Honour’s rejection of the unlawful detention argument fails.

The finding of prejudice

295. As we have noted, the primary Judge ultimately rejected the appellants’ applications for an extension of time in which to institute proceedings in respect of their common law claims, including the claims founded on false imprisonment. His Honour accepted the Commonwealth’s defence that it had suffered ‘irreparable prejudice’ through the absence of material witnesses and the infirmities of others (at para [1420]).

...

301. ... We have pointed to the significance of the evidentiary gaps on the issue of whether the Director detained Mrs Cubillo between 1947 and 1953. Evidence from the missing or infirm witnesses might have made it clear that the Director had not detained Mrs Cubillo, either at all or after her arrival at the Retta Dixon Home. The evidence of those arrangements was simply not available to the Commonwealth or to the Court. The absence of Mr Moy, Miss Shankelton, Maisie Nampijimpa and contemporaneous documentation, made a fair trial on the issue of whether the Director detained Mrs Cubillo on and after her admission to the Retta Dixon Home impossible.

...

303 The position is much the same as far as Mr Gunner is concerned. ...

The breach of duty claims

304. Mrs Cubillo alleged that her removal from the Phillip Creek Settlement and her subsequent detention in the Retta Dixon Home gave rise to a claim in negligence against the Commonwealth. A similar allegation was made in relation to the removal of Mr Gunner from Utopia Station and his subsequent detention in St Mary’s Hostel.

305. ... [T]he issues canvassed on the appeal were much narrower and in significant respects different from those dealt with by the primary Judge. An important question which must be resolved is whether the appellants have sought impermissibly to reformulate their breach of duty claims.

...

The appellants’ case on appeal

The appellants’ written submissions

337. By their notices of appeal the appellants claimed that the primary Judge had erred in finding that the circumstances of their removal and detention had not given rise to a duty of care on the part of the Commonwealth. In their written submissions, the appellants argued as follows:

  • The Commonwealth’s involvement, through the acts of its servants or agents, in the removal and subsequent detention of the appellants, gave rise to a duty of care.
  • So, too, did the vulnerability of the appellants to the exercise by the Commonwealth of its power and control over their lives.
  • The Commonwealth had sufficient power to enable it to have protected the appellants from the actions of Mr Walter and Mr Constable.
  • The primary Judge had approached the question whether a duty of care should be imposed upon the Commonwealth on the basis that it turned upon whether its servants or agents had failed to exercise statutory powers conferred upon them. It did not. The appellants’ case was that the Commonwealth owed them a duty of care because of the positive acts which had been undertaken by its servants or agents. His Honour’s reliance upon the principles enunciated by McHugh J in Crimmins had been misplaced. Those principles were directed towards a failure to exercise statutory powers and were not applicable to the performance of positive acts.
  • The primary Judge had confused the role played by public law concepts when determining that no duty of care existed. It made no difference whether or not the Director had formed an opinion as to the best interests of the child before ordering that the child be removed. A decision taken lawfully could still give rise to a breach of a common law duty of care. By using phrases such as ‘core area of policy making’ (at para [1230]) and ‘statutory discretion that involves policy considerations’ (at para [1207]) his Honour had employed public law concepts that were in no way relevant to whether or not the Commonwealth was under a duty of care to the appellants.
  • The primary Judge had erred in holding that the fact that the decision to remove each appellant had the ‘potential’ to be ‘a policy decision’, exercised in pursuit of welfare considerations, meant that the courts were not fit to assess that decision (at para [1222]). A common law duty of care may exist even where a public authority performs acts which it is permitted by statute to carry out: see Crimmins at 36, per McHugh J.
  • The reasoning of the primary Judge had been significantly influenced by the ‘policy operational distinction’ referred to in X (Minors) at 738–739. That formulation by Lord Browne-Wilkinson had been rejected by a majority of the House of Lords in Stovin v Wise [1996] UKHL 15; [1996] AC 923, at 951, while in Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330, Toohey J (at 358) and Gummow J (at 393–394) had expressed the view that the distinction was unhelpful on the facts of that case.
  • The primary Judge had failed to consider whether the appellants had made out a cause of action for breach of duty against the Commonwealth in those areas where his Honour had found that the Commonwealth had had ‘a fair trial’. There were several such areas including, in particular, the allegations of assault against Mr Walter and Mr Constable (at para [1423]).

The Commonwealth’s Written Submissions

338. In its written submissions, the Commonwealth emphasised the limited nature of the case relied on by the appellants. In particular, they had alleged only that the Commonwealth, not any other person or officer, had breached a duty owed to them. ...

...

The Oral Submissions

...

343. Perhaps because Mr Rush recognised the problems created for the appellants by the primary Judge’s findings of fact, his oral submissions on the appeal were framed quite differently from the written submissions. The arguments presented were not only much narrower, but raised contentions that had not been addressed by the primary Judge.

344. Mr Rush began by submitting that the appellants had been owed a duty of care by the Commonwealth because of the involvement of its servants or agents in their removals which, even had they been lawful, had been carried out in a negligent manner. That proposition provoked sustained questioning from the Court because the primary Judge had not, at any stage in his reasons for judgment, addressed that issue. ...

...

Was the case on appeal put at trial?

The manner of removal

...

369. In our view, the appellants should not be permitted to raise for the first time on appeal the contention that they suffered harm by reason of the manner of their removal. Had this issue been raised before the primary Judge, it would almost certainly have been the subject of further evidence. Furthermore, his Honour would have been invited to make findings, not only on the substance of the contentions but on the critical question of the prejudice that the Commonwealth would have encountered in defending this claim so many years after the relevant events occurred. In short, the appellants’ contentions, as reformulated on the appeal, are not founded on facts established beyond controversy or on pure questions of law. It would not be in the interests of justice for the appellants to be permitted to recast their case on the appeal.

The failure to maintain contact

...

378. We consider that the claims made by Mrs Cubillo and Mr Gunner concerning the Commonwealth’s failure to ensure that contact was maintained with their families cannot be advanced on the appeal. In any event, it is difficult to see how they could be sustained having regard to the primary Judge’s findings and the gaps in the evidence.

Liability for physical and sexual assault

379. It was submitted on behalf of the appellants that the Commonwealth should be held liable for breach of duty for having failed to protect them from physical and sexual assault.

...

386. In our view, Mrs Cubillo should not be permitted to pursue the claims founded on a breach of duty in failing to protect the appellants from physical or sexual assault for the first time on the appeal. It is therefore not appropriate for us to consider whether his Honour erred in finding that the Commonwealth neither knew nor ought to have known of Mr Walter’s predilection to violence.

The unsuitability of St Mary’s Hostel

387. ... Mr Gunner did not dispute the primary Judge’s finding that the Commonwealth was not in a position to have known that Mr Constable had a propensity to molest children in his care. His submission was that the Commonwealth had breached its duty of care to him simply by sending him to St Mary’s Hostel because it was an institution known to be unsuitable for someone of his age and background.

388. This, too, was a claim that was neither pleaded nor argued before the primary Judge. ... Had the issue been raised at trial, a number of factual questions would have required investigation. For example, as the Commonwealth pointed out, there was no evidence concerning the conditions in other institutions in Alice Springs or elsewhere in the Northern Territory that might have been alternatives to St Mary’s Hostel.

...

The failure to ensure that Mr Gunner’s mother was properly informed

391. Mr Gunner contended that the Commonwealth was liable for having failed to ensure that his mother was properly informed about conditions at St Mary’s Hostel before procuring her consent to his removal and detention. ...

392. ... The submission attracts the general rule that a point not taken at trial cannot be raised on appeal in a case where, if the point had been taken at trial, evidence could have been given which might have prevented it from succeeding. It would be inappropriate to entertain the argument.

The finding of prejudice

...

399. The findings of prejudice to the Commonwealth made by his Honour were clearly open to him. They applied to the breach of duty claims advanced by the appellants at the trial. Some of these findings also plainly would apply to the reformulated breach of duty claims if the appellants (contrary to our holding) were permitted to put them forward.

Extension of time

400. The primary Judge rejected the appellants’ applications, made pursuant to s 44(1) of the Limitation Act, for extensions of time in which to institute their respective actions against the Commonwealth. His Honour’s rejection of these applications was fatal to the appellants’ claims except insofar as they were founded on breach of fiduciary duty. The appellants challenged, as they were bound to do, his Honour’s refusal to exercise in their favour the discretion conferred by s 44(1) of the Limitation Act. ...

...

The cause of action argument

437. The appellants’ first complaint was that the primary Judge had failed to assess prejudice to the Commonwealth by reference to each cause of action relied on by the appellants. ... [W]e think that the submission is without foundation.

...

The findings of prejudice

443. ... [W]e have considered the primary Judge’s findings on prejudice in the context of our discussion of the appellant’s false imprisonment and breach of duty claims (see above). ... [H]is Honour’s finding that the Commonwealth had sustained irremediable prejudice in defending the proceedings was amply justified on the evidence.

Exercise of discretion

...

445. ... [His Honour] took the view that the fact that a very long time had elapsed since the critical events rendered it impossible for the Commonwealth to receive a fair trial. It was plainly open to the primary Judge to reach this conclusion.

...

Fiduciary duties

The appellants’ claims

447. The appellants contended at first instance that a fiduciary relationship existed between each of them and the Commonwealth. In the alternative, they contended that a fiduciary relationship existed between each of them and the Directors and that the Commonwealth knowingly participated in the Directors’ breaches of their fiduciary duties. Notwithstanding the statements by the primary Judge to the contrary (at para [1270]), it was not part of the appellants’ case at first instance that the Commonwealth had ‘a vicarious liability’ for any breach of fiduciary duty on the part of the Directors. Nor was any such contention put on appeal.

...

449. The appellants pleaded that the fiduciary relationship between them and the Commonwealth arose from a variety of circumstances. The primary Judge summarised the circumstances relied on by the appellants as follows (at para [1276]):

The fiduciary relationship ... was said to arise because of the role and functions of the Commonwealth’s servants and agents in the removal and detention of the [appellants] and because of the Commonwealth’s powers over, and its assumption of responsibility for, Aboriginal people in the Northern Territory. It was also said to arise because of the powers, obligations and discretions of the Directors and the vulnerability of each [appellant] to the exercise of those powers and discretions... .

450. The appellants identified the fiduciary duties allegedly owed to them by the Commonwealth in general terms. The duties were said to include a duty properly to supervise any institution or person into whose care the appellants were placed and a duty to advise the appellants to obtain independent legal advice.

451. The appellants pleaded that the Commonwealth, in removing and detaining them, had acted in breach of its fiduciary duties. The particulars of breach largely reproduced the particulars of the breaches of duty of care alleged against the Directors in their capacity as guardians of the appellants. In addition, however, the appellants contended that the interests of the Commonwealth conflicted with the appellants’ interests, in two respects:

(i) The interests of the Commonwealth in destroying the appellants’ family and cultural associations and connections, providing domestic and manual labour for the European community and breeding out ‘half-caste’ Aboriginal people conflicted with the appellants’ interests in maintaining their association with their families and culture, achieving recognition of traditional land rights and avoiding psychological harm.

(ii) The interests of the Commonwealth in not being exposed to legal action by the appellants conflicted with the appellants’ interests in being in a position to pursue legal or equitable remedies against the Commonwealth.

452. The appellants also pleaded that the Directors owed them fiduciary duties. The fiduciary relationship was said to arise, inter alia, from the role performed by the Directors of Native Affairs and Welfare as legal guardians of the appellants to s 7 of the Aboriginals Ordinance and s 24 of the Welfare Ordinance. The appellants alleged that the Directors breached their fiduciary obligations to the appellants in substantially the same respects as the Commonwealth. Of course, the Directors were not parties to the proceedings, but the Commonwealth was alleged to have knowingly participated in the Directors’ breaches of fiduciary duty.

The primary judgment on fiduciary duties

453. The primary Judge found that the first ground of alleged conflict of interest (in which the Commonwealth was said to have an interest in destroying the appellants’ cultural and family associations) lacked evidentiary support (at paras [1305], [1306]). There is no appeal from that finding.

454. His Honour rejected the second ground of alleged conflict of interest (based on the failure of the Commonwealth or the Directors to advise the appellants of their legal rights). He said that this argument had fallen by the wayside because of his ‘factual findings that the [appellants had] failed to prove that any of their rights were infringed’ (at para [1289]).

455. So far as the existence of fiduciary duties was concerned, the primary Judge observed that in Bennett v Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408 at 411, Mason CJ, Deane and Toohey JJ had recognised that the relationship of guardian and ward created a fiduciary relationship. Similarly, he referred to the observation of the Full Court in Paramasivam v Flynn, at 504, that:

[a] relationship such as that of...guardian and ward may give rise to duties typically characterised as fiduciary – not to allow duty and interest to conflict and not to make an unauthorised profit within the scope of the relationship....

His Honour concluded, however, that it would be inappropriate for a Judge at first instance to expand the range of fiduciary relationships to accommodate conflicts of interest which did not include ‘an economic aspect’. ...

456. [The primary Judge also would have upheld] the Commonwealth’s contention that the appellants’ claim for equitable compensation ... had been barred by the equitable defence of laches. ...

...

The scope of fiduciary duties

460. As the primary Judge recognised, the Director owed fiduciary obligations to the appellants by virtue of his statutory role as their legal guardian. His Honour was correct to do so. [See Clay v Clay [2001] HCA 9; (2001) 178 ALR 193; Countess of Bective v Federal Commissioner of Taxation [1932] HCA 22; (1932) 47 CLR 417, at 420–421, per Dixon J; Wik Peoples v Queensland (1996) 187 CLR 1, at 90, per Brennan CJ.]

461. The Commonwealth was not, however, the appellants’ guardian. Whether or not the Commonwealth owed fiduciary duties to the appellants, as their pleadings acknowledged, depended on other considerations. The primary judge appears not to have made a finding as to whether there was a fiduciary relationship between the Commonwealth and the appellants. Although there are statements in the section of the judgment dealing with laches that suggest that his Honour had found that there was no such relationship, it is clear enough that this was not the effect of his earlier reasoning. The primary Judge proceeded on the basis that, if there was a fiduciary relationship between the Commonwealth and the appellants, the Commonwealth had not breached its fiduciary duties.

462. Even if the Commonwealth did owe fiduciary duties to the appellants, that was merely the beginning of the inquiry. ... [T]he fact that one person is in a fiduciary relationship with another does not mean that all aspects of their relationship are necessarily governed by equitable principles: Breen v Williams (1996) 186 CLR 71, at 92, per Dawson and Toohey JJ.

...

465. ... Insofar as the appellants’ case on fiduciary duties is co-extensive with their case on breach of duty of care, it faces two insurmountable obstacles. The first is that the primary Judge made findings adverse to the appellants which undercut their claims. For example, the primary Judge was not satisfied that the removal and detention of Mrs Cubillo was not authorised by the Aboriginals Ordinance. Any fiduciary obligation must accommodate itself to the terms of statute. In particular, a fiduciary obligation cannot modify the operation or effect of statute: to hold otherwise, would be to give equity supremacy over the sovereignty of Parliament: Tito v Waddell (No 2) [1977] Ch 106, at 139. It follows that if the removal and detention of Mrs Cubillo had been authorised by the Aboriginals Ordinance, no fiduciary obligation could forbid what the legislation permitted. In the case of Mr Gunner, the primary Judge found that he had been removed from Utopia Station at the request and with the informed consent of his mother and that the Director had not participated in the removal. This finding leaves no room for Mr Gunner’s claim that his removal was in breach of fiduciary duties owed to him by the Commonwealth.

466. The second obstacle is that, in any event, the appellants’ claims are, to use the language of Paramasivam v Flynn, within the purview of the law of torts. As the High Court has held, there is no room for the superimposition of fiduciary duties on common law duties simply to improve the nature and extent of the remedies available to an aggrieved party. If it had been the case that the removal and detention of the appellants were not authorised by the Ordinances (or otherwise justified by law), those who caused the removal or detention would be guilty of tortious conduct and liable at common law. There would be no occasion to invoke fiduciary principles.

The alleged conflict of interest and duty

467. The only instance of conflict of interest and duty relied on by the appellants in the appeal was the alleged failure of the Commonwealth to advise the appellants of their legal rights or to advise them to obtain independent legal advice in relation to their rights. ...

468. ... Since we have upheld his Honour’s findings rejecting the appellants’ claims based on breach of duty and false imprisonment, it follows that his Honour was correct in concluding that any breach of fiduciary duty could not have caused the appellants any loss that could be the subject of equitable compensation.

...

Laches

470. The appellants did not challenge the primary Judge’s statement of the test to determine whether a claim for equitable compensation for breach of fiduciary duty is barred by the equitable defence of laches. Their submissions were confined to a challenge to his Honour’s finding that if, contrary to his views, the appellants had a claim for breach of fiduciary duty it would be ‘grossly unfair’ to allow the claim to proceed. That challenge was made simply by way of assertion and was not developed.

471. ... We see no error in his Honour’s approach.

Damages

472. Submissions were made on behalf of the appellants that the primary Judge’s assessment of damages in each case, assuming liability to have been established, was too low. It is not necessary for us to address those submissions.

Conclusion

473. The primary Judge dismissed the appellants’ claims on two principal alternative bases. First, he rejected their common law, statutory and equitable claims on the evidence presented to him. Secondly, having regard to the prejudice sustained by the Commonwealth having to defend the proceedings so many years after the relevant events occurred, he declined to grant the extension of time the appellants required in order to commence the proceedings to pursue their common law claims. He also upheld the Commonwealth’s defence to the appellants’ equitable claims on the basis of laches.

474. As we have explained, the case presented by the appellants on the appeal was more limited and, in some respects, quite different from the contentions put to the primary Judge. Although we have not agreed with all aspects of the primary Judge’s reasoning, we have found no appellable error in the conclusions he reached. We have also taken the view that the appellants should not be permitted to recast their breach of duty claims on appeal. To do so would be unjust. Accordingly, the appeals must each be dismissed.

475. We were asked by the parties to reserve the costs of the appeal. Accordingly, we shall give the parties an opportunity to make submissions as to costs.

Counsel for the Appellants:

Mr JT Rush QC with Mr MA Dreyfus QC and Ms M Richards

Solicitors for the Appellants:

Holding Redlich

Counsel for the Respondent:

Mr DR Meagher QC with Dr M Perry and Ms C Beaton-Wells

Solicitor for the Respondent:

Australian Government Solicitor

Download

No downloadable files available