Tito v Waddell (No 2) [1977] Ch 106
Payments held ‘on trust’ for islanders following compulsory acquisition; whether trust enforceable
Facts
Banaba island was a British settlement and the land was owned by individual Banabans. The Crown granted a license to a British company to mine the phosphate which had been discovered there. The Banabans refused to sell or lease further land and the Crown compulsorily acquired it. Monies paid were to be held ‘on trust’ for the Banabans and the land was to be replanted to its former state after the mining. Some funds purchased another island and the Banabans were relocated. They sought damages for the ‘true’ value of the land, and an order for specific performance for its restoration.
Issues
The Banabans contended the Crown stood in a fiduciary position, and the figures paid for the land were substantially less than they should have been. They had not appreciated the value of the land, had received no legal advice and sought damages to the amount that ought to have been paid. Since the Crown was a fiduciary, they were under a duty to give full disclosure to the Banabans as to the land’s value, to give full commercial value to them, or to ensure they obtained appropriate advice. The Crown argued there was no trust in the truest sense and, therefore, there were no fiduciary obligations incumbent upon them. They further contended any claim for specific performance was time barred.
Held
The Banabans were unsuccessful in their claim. Although the word ‘trust’ was used within the agreements, there was no trust in the sense of imposing fiduciary duties enforceable in the courts. The agreements imposed governmental obligations upon the Crown which were unenforceable by the courts. The order for specific performance was not granted because the relevant landowners did not appear before the court.
Updated 20 March 2026
This case summary accurately reflects the decision in Tito v Waddell (No 2) [1977] Ch 106 as reported. The case remains good law and continues to be cited in equity and trusts scholarship for the distinction between true fiduciary duties enforceable in equity and mere governmental or administrative obligations. No subsequent legislation or appellate authority has overruled or materially qualified the principles established in this case. The article is suitable for students studying the nature and enforceability of fiduciary duties and the limits of the trust concept. Readers should be aware that the broader context of Crown dealings with indigenous peoples and compulsory acquisition has been the subject of significant legal and academic development in other jurisdictions, though this does not affect the core English law principles stated here.
