A West Australian family that took the State Government to court in a Stolen Generations test case has lost its bid for compensation.

Donald and Sylvia Collard had nine children removed from their care in the 1950s and 60s.

The children were split up and placed in state care, during which time some of them allege they were sexually abused.

The Collards launched legal action in the West Australian Supreme Court in the hope of receiving compensation for the ongoing impact the separation has had on their lives.

However, today Justice Janine Pritchard dismissed the case.

In her 410-page judgement, Justice Pritchard said while she felt for the family, its case was not established.

"I am conscious that it is difficult for a third party to comprehend the enormity of the emotional pain and heartache experienced by all of the plaintiffs as a result of the children being made wards and living apart from their family for so many years," she said.

"Having said that, it is impossible not to be deeply moved by the plaintiffs' experiences, and one cannot help but admire their efforts to rebuild and maintain their family relationships.

"The application of the applicable legal principles to the facts established on the balance of probabilities by the evidence leads to the conclusion that the state was not, and is not, subject to the fiduciary duties alleged by the plaintiffs.

"Even if the state was subject to those duties, the plaintiffs did not establish that the state breached those duties, other than in relation to a decision which was made in November 1959 not to return Ellen to Don and Sylvia's care.

"Furthermore, the plaintiffs have no right of action against the state because they did not comply with the requirements of the Crown Suits Act."

'Devastating' outcome

Mr Collard expressed his disappointment with the result outside the court.

"It wasn't the money we wanted," he said.

"It's a shame and a disgrace to put us through this again in this modern day and time.

"Honestly, I am bitter. I thought maybe my wife and girls would get maybe a bit of gratitude or something towards them."

The chief executive officer of the Aboriginal Legal Service, Dennis Eggington, has described the outcome of the case as devastating.

But Mr Eggington says despite the decision, the court case was important in outlining the impact of removing Aboriginal children from their parents.

"Despite the disappointment, there is a long transcript to look through. We're going to work with our legal team to see what it contains," he said.

"In the end, the family have shown that no matter what is thrown at Aboriginal people in this country, we're survivors, we're resilient."

Mr Eggington says the Collard family have shown a strength of character that is second to none against "almost insurmountable odds".

"They're very disappointed, but the family went into this knowing what odds were against them and to their credit they've stuck with it. They're still here today," he said.

"Hopefully in the end, what it will do is help the people of Australia have a moral fabric to not allow people to have to live through horrors and torments of their past through a legal system that sometimes have no redress for them.

"It has helped the family to grow together, to strengthen, from a family that was split up and torn apart by government policies."

Child taken after visit to hospital

During the trial earlier this year, the court heard how one of the children was taken to hospital ill and when her parents went to collect her, they were told she had been fostered out.

The Collards were living in a bush camp and working as shearers on a wheat-belt farm when they took their daughter Ellen to hospital.

Mr Collard told the ABC last year that they were shocked when they went to collect their baby.

"When we got there, they said 'she's gone'," he said.

"We thought she'd died, me and Sylvie sort of went into shock: 'What? Died?' 'Oh no, we fostered her out'.

"We just collapsed on the floor when she said that. I never thought they could do that."

Ellen had been taken to live with a white family in Perth.

The Collards say more children were taken when a welfare worker and a policeman visited their camp in 1961.

"They came and got them, took them and we had no say," Mrs Collard said.

"If we had started arguing or rowing, we'd have went to jail."

The children were split up and sent to various institutions and foster homes.

One of the siblings, Glenys Collard, told the ABC she was taken to Sister Kate's Children's Cottage Home in Perth, where she endured years of sexual abuse.

She says the perpetrators were volunteers who offered to look after the children on weekends.