In the recent case of Habib v Commonwealth of Australia (No. 2) (2009) 254 ALR 250, the Federal Court examined whether the Commonwealth owed a fiduciary duty to its overseas nationals and, if so, whether this duty extended to protecting a citizen from unlawful detention.

Background

In October 2001, following the terror attacks on 11 September 2001, a chain of events saw Mr Habib (an Australian national) detained by Pakistani authorities, Egyptian authorities and the US Department of State. Between 2001 and 2005, Mr Habib was held at Guantanamo Bay, on the basis of allegations that he was a terrorist.

Mr Habib was eventually released without charge.

Mr Habib commenced Federal Court proceedings against the Commonwealth claiming, amongst other things, intimidation, breach of fiduciary duty, breach of a duty of assistance, breach of a duty to consider whether to assist Mr Habib, an action based on a substantive legitimate expectation, harassment and misfeasance.

The Commonwealth applied for judgment against Mr Habib in relation to all but one of Mr Habib’s claims on the basis that his proceedings had no reasonable prospects of success.

The Court addressed each claim in detail, however, for the purposes of this article, we have focused on Mr Habib’s claim that the Commonwealth owed Mr Habib a fiduciary duty and acted in breach of that fiduciary duty in that it failed to prevent the unlawful detention and alleged torture perpetuated by Pakistani, Egyptian and US authorities.

Judgment

The Federal Court acknowledged that there is a kind of duty for a State to protect its overseas nationals from unlawful detention, but that duty is an imperfect and thus unenforceable one.

The Commonwealth’s submission was that, since it had not acted for, or on behalf of, Mr Habib, it could not be found to owe a fiduciary duty to him. The Federal Court rejected this argument. It noted that the Commonwealth had in fact taken significant steps, on behalf of Mr Habib, by contacting and attempting to negotiate with the authorities that were said to have perpetuated the unlawful detentions and acts of torture. The Court acknowledged that, at trial, the Commonwealth may be able to show that it was not taking those steps on Mr Habib’s behalf but for some other reason, however the Federal Court did not find this a sufficient reason to strike out Mr Habib’s claim.

Despite the Commonwealth’s failure in respect of its primary argument, the Court ultimately accepted the Commonwealth’s submission that it did not owe a fiduciary duty to Mr Habib and rejected Mr Habib’s submissions on three grounds:

  1. for the Court to determine the issue of fiduciary duty in relation to overseas nationals, it would invariably stray into territory that it was not jurisdictionally capable of making a ruling in relation to. Since the power to conduct foreign relations is vested in the Commonwealth by section 61 of the Constitution, the executive is answerable to Parliament only, and not the Court, on this issue
  2. there currently exists no precedent that would support an argument for equity to impose a fiduciary duty on the Commonwealth for foreign relations, and
  3. since breach of fiduciary duty requires that there be a confl ict of interest, or competing duties present, Mr Habib would need to establish that the Commonwealth had a competing duty which confl icted with its alleged duty to him. The Court found that the only interest of the Commonwealth is as prescribed under section 61 of the Constitution which, for the reason given at paragraph 1 above, the Court does not have the power to review.

The Court therefore ordered that Mr Habib’s claim for breach of fiduciary duty by the Commonwealth should be struck out.

As stated above, Mr Habib’s claim for breach of fiduciary duty by the Commonwealth was one of only a number of claims raised by him against the Commonwealth. The Court found that there was a possibility that Mr Habib had a case for misfeasance of public office, harassment and/or defamation against the Commonwealth and thus Mr Habib was granted leave to re-plead these claims.

Conclusion

Whilst the Court acknowledged that there was “some kind of duty” owed by the Commonwealth to its overseas nationals, it held that this was a “political” duty and not one that was enforceable. The Court took the view that, to enforce such a duty in favour of Mr Habib would require the Commonwealth, in matters of foreign policy, to prefer the interests of Mr Habib over the nation’s interests as a whole.

From a practical perspective, this means that Australian citizens travelling overseas are not guaranteed any degree of protection or intervention by the Commonwealth. Such decisions will rest solely on the executive and will be subject to foreign policy and political considerations.