Application of fiduciary principles to public office

Abstract

With this edition, we are pleased to announce that the Editorial Board of Trusts & Trustees has been joined by the Honourable Dyson Heydon AC QC, a former Justice of the High Court of Australia and a past contributor to this Journal. His article ‘Modern Fiduciary Liability: The Sick Man of Equity’1 dealt with the consequences of departure from the principles of equity in determining liability of persons in fiduciary situations. As the article’s abstract stated: Some think that fiduciary liability has shrunk, is shrinking and should be shrunk further. In particular, it has been said that traditional equitable duties of skill and care are not fiduciary, and, indeed, are not even equitable. It has also been said that no positive duty can be fiduciary. The article contends that these trends conflict with established authority, are unsound in principle, and have undesirable effects in practice. The case studies examined have revealed widespread misconduct that has taken place in every polity in Australia except for the Northern Territory. There is little that is controversial about the underlying facts. Almost all of the underlying facts have been established by admissions to the Commission, incontrovertible documents, decisions of courts and tribunals or well-corroborated testimony. There has been much perjury. Nor is it only union officials who have been involved. Of course what has been described is not universal. It may not even be typical. But you can look at any area of Australia. You can look at any unionised industry. You can look at any type of industrial union. You can select any period of time. You can take any rank of officeholder, from Secretaries down to very junior employees. You can search for any type of misbehaviour. You will find rich examples over the last 23 years in the Australian trade union movement. These aberrations cannot be regarded as isolated. They are not the work of a few rogue unions, or a few rogue officials. The misconduct exhibits great variety. It is widespread. It is deep-seated. Nor can the list be regarded as complete. It would be utterly naïve to think that what has been uncovered is anything other than the small tip of an enormous iceberg. It is inherently very hard to identify most types of misconduct by union officials. So far as it is typified by hard core corruption, there is no ‘victim’ to complain, and the parties to the corruption have a strong incentive to keep it secret. Whistleblowers are unlikely to be found for various reasons including a well-founded fear of reprisals. … But it is clear that in many parts of the world constituted by Australian trade union officials, there is room for louts, thugs, bullies, thieves, perjurers, those who threaten violence, errant fiduciaries and organisers of boycotts.