Groote Eylandt Aboriginal Trust Inc v Attorney-General of the Northern Territory [2025] NTSC 86

Elderfield (by her litigation guardian Visentin) v Transport Accident Commission [2010] VSC 116; (2010) 55 MVR 206; Fairhurst (bht NSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388; Fisher v Marin [2008] NSWSC 1357; Flynn v Mamarika (Mamarika) [1996] NTSC 16; (1996) 130 FLR 218; GEAT v Attorney-General of the Northern Territory [2024] NTSC 83; GEAT v Deloitte, Touche Tohmatsu & Ors [No 2] [2017] NTSC 04;

Groote Eylandt Aboriginal Trust Incorporated v Attorney-General of the Northern Territory (No 2) (GEAT No 2) [2024] NTSC 87; Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66; Permanent Trustee Co Ltd v Mills [2007] NSWSC 336; (2007) 71 NSWLR 1; Stephens-Sidebottom v Victoria (Department of Education and Early Childhood Development) [2011] FCA 893; Wigmans v AMP Ltd (Wigmans) [2021] HCA 7; (2021) 270 CLR 623, referred to.

Groote Eylandt Aboriginal Trust Inc v Attorney-General of the Northern Territory [2025] NTSC 86

GROOTE EYLANDT ABORIGINAL TRUST INCORPORATED (NT 00142C)

• [1] In GEAT (No 2)[1] this Court provided the Groote Eylandt Aboriginal Trust Incorporated (GEAT) as the trustee of the Groote Eylandt Aboriginal Trust (the Trust) advice to the effect that it was justified in defending a proceeding (the Proceeding) brought against it, and a co-defendant, the Anindilyakwa Land Council (ALC), by the Groote Eylandt Mining Company Pty Ltd (GEMCO).
• [2] The dispute raised by the Proceeding was subsequently resolved at mediation. That resolution was subject to the separate approval of each of the parties and, in the case of GEAT, the approval of this Court. This application involves the latter and is sought by amendment to the summons that GEAT originally filed in this proceeding in August 2024. The final form of that amendment seeks this Court's approval of the compromise of the Proceeding: "... on the terms set out in the Heads of Agreement entered into on or about 26 February 2025, between [GEAT, GEMCO and the ALC]."[2]

• [3] The Anindilyakwa-speaking Aboriginal people have lived their traditional lifestyle on Groote Eylandt and Bickerton Island in the Gulf of Carpentaria since time immemorial. The Anindilyakwa language is the main feature which distinguishes this group from other Aboriginal people.
• [4] Groote Eylandt was gazetted as a reserve for Aboriginals under the Aboriginals Ordinance 1918 (NT) on 15 May 1920. That reservation was revoked on 7 November 1963 and in its place the Arnhem Land Reserve (which included Groote Eylandt) was reserved for the use and benefit of wards under s 6 of the Welfare Ordinance 1953 -1963 (NT). Since 26 January 1977, when the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (ALRA) commenced, the Arnhem Land (Islands) including Groote Eylandt have been listed in Schedule 1 of that Act as Aboriginal land.
• [5] The Anindilyakwa people's first significant contract with Europeans came in 1921 when the Church Missionary Society (CMS)[4] established a mission at Emerald River on the western side of Groote Eylandt. In 1943 that mission was relocated to Angurugu.
• [6] The possibility of mining activities being undertaken on Groote Eylandt arose in the late 1950s and early 1960s. Alive to that possibility, in 1961, Rev James Arnold Taylor, on behalf of the CMS, applied for and obtained permits to prospect for mineral deposits on Groote Eylandt. In this respect it is important to note that, from the outset, the CMS acted "for the purpose of assisting the people of Groote Eylandt and Bickerton Island (who were then wards of the State) and not for obtaining any benefits for themselves".[5]
• [7] The real prospect of those mining activities occurring emerged shortly thereafter when the CMS was approached by Broken Hill Proprietary Company Limited (BHP). It expressed an interest in prospecting and mining for manganese and other minerals on Groote Eylandt. However, under the Legislative scheme in force at the time only one exploration permit could be issued for a particular area. Consequently, the CMS agreed with BHP that it would surrender its permits to allow BHP to be granted an exploration permit on certain conditions. In time this agreement led to the CMS and BHP entering into the original version of the GEAT Royalty Agreement. That occurred on or about 7 June 1963. Among other things, that agreement provided that BHP would pay the CMS royalty payments based on each tonne of manganese despatched from Groote Eylandt in excess of 100,000 tonnes in any one calendar year, plus an annual payment.
• [8] Approximately two years after the original GEAT Royalty Agreement was entered into, BHP was granted Special Mineral Leases for three areas on the western side of Groote Eylandt in close proximity to Angurugu.[6] It immediately transferred those leases to its subsidiary company, GEMCO. Soon thereafter it began to mine and ship manganese ore from Groote Eylandt.
• [9] Initially, the CMS paid the royalty payments that it received from GEMCO to an unincorporated association known as the Groote Eylandt Trust. On 28 August 1969, GEAT was incorporated to act as trustee of the Trust. Although the Trust was established in May 1965 its terms were not formally recorded until 1989 when the GEAT Trust Deed was executed. Several significant amendments were made to that Trust Deed in 1996, following this Court's decision in Mamarika, and others have been made since_._[7] Over the years since 1965, with the exception of a brief hiatus at about the time of the Mamarika judgment, GEAT has received all royalty payments on behalf of the Trust.
• [10] There has, since 1965, been a number of variations to the GEAT Royalty Agreement. At least two are worthy of mention. The first occurred on or about 6 December 1967, after the introduction of decimal currency in Australia, when BHP proposed a variation to the method whereby royalty payments were to be calculated. It proposed that the new calculation be

1¼% of the free on-board value, less certain deductions, of the manganese ore shipped from Groote Eylandt. This variation was agreed to in an exchange of correspondence. The second variation of note occurred on or about 25 October 2000 when the original parties entered into a Deed whereby BHP's interests in the agreement were assigned to GEMCO and CMS's interests were assigned to GEAT.

• [11] In addition to these agreements, GEMCO entered into three agreements with the Anindilyakwa Land Trust (ALT) that are relevant for present purposes. The ALT was established in 1991 as the relevant land title holder for Groote Eylandt under s 4(2A) of the ALRA. Under the terms of the ALRA, that title is held for the benefit of Aboriginal people who are entitled by Aboriginal tradition to the use or occupation of the land concerned. The ALT's functions are undertaken at the direction of the ALC. Each of the three agreements in question related to a different area of Groote Eylandt. The first, the Western Mining Agreement, was made in 2006. This Agreement concerned several mineral leases which GEMCO held on the western side of Groote Eylandt: MLs 951 to 953 and 956 to 961. It was varied in 2012 to extend its term for a further period of 21 years. The other two agreements, the Eastern Mining Agreement and the Southern Mining Agreement, were made on or about 17 May 2016. They concerned areas on the eastern and southern areas of Groote Eylandt respectively.

• [12] GEMCO commenced the Proceeding on 17 June 2024. As appears in the Statement of Claim[8] it concerned several mining leases that GEMCO held and intended to develop in the eastern and southern areas of Groote Eylandt. By way of relief, it sought declarations as to whether the GEAT Royalty was payable with respect to minerals derived or obtained from those leases. By its defence[9] the ALC sought declarations that the GEAT Royalty was not so payable. For its part, GEAT sought declarations that the GEAT Royalty was payable "irrespective of the geographic location of the specific tenements from which the ore was extracted for so long as GEMCO, or its successors, holds mining titles on Groote Eylandt."
• [13] In brief summary, the dispute between the parties therefore concerned whether the GEAT Royalty:

(a) applied to the whole of Groote Eylandt;

(b) applied to all ores extracted from Groote Eylandt, or only to manganese; and

(c) continued during the life of particular mining titles, or during the life of all mining titles granted to, or operated by, or on behalf of, GEMCO.

• [14] In respect of these matters, GEAT contended that the GEAT Royalty applied to the whole of Groote Eylandt, that it applied to all ores extracted by GEMCO and that it continued during the life of GEMCO's mining activities on the Island. On the other hand, the ALC's position was that the GEAT Royalty was confined to manganese extracted from the leases covered by the Western Mining Agreement. It claimed that certain provisions of the ALRA effected this confinement. GEMCO adopted a neutral position on all of these matters.

• [15] The dispute was resolved in February 2025 at a mediation conducted by the Honourable John Mansfield A.M. K.C. That resolution was recorded in a Heads of Agreement document which, among other things, provided for a further variation of the GEAT Royalty Agreement. Its implementation was subject to the approval of the Board of GEMCO and the Traditional Owners of Groote Eylandt represented by the ALC. For GEAT's part it was subject to its consultation with the people of Groote Eylandt who benefited from the GEAT Royalty as defined in the GEAT Trust Deed and the approval of this Court. GEMCO and the ALC have since indicated that they have obtained their necessary approvals. As already noted, GEAT's approval is partly contingent on the present application.
• [16] The pivotal provisions of the Heads of Agreement are contained in clauses 2.1(a), (c) and (d) as follows:

In lieu of clause 2 (b) of the Royalty Agreement, as amended, GEMCO is to pay to GEAT a royalty of 1% net of the gross realization value of all ore despatched from Groote Eylandt calculated in the same way as Gross Revenue as calculated in the [Eastern Mining Agreement] as at the date of this Heads of Agreement.

Clause 2.1(a) above is to be implemented by GEMCO and GEAT entering into a variation of the Royalty Agreement (Variation Agreement).

The Parties agree that the Variation Agreement will continue for the duration of the mining operations on Groote Eylandt of GEMCO and its successors and assigns.

• [17] The effect of these provisions, as they apply to the matters in dispute summarised earlier, was that:

(a) the GEAT Royalty was payable for all ore extracted and despatched from Groote Eylandt;

(b) the GEAT Royalty Agreement applied to the whole of Groote Eylandt and to all types of ore extracted and despatched therefrom; and

(c) the life of the GEAT Royalty Agreement was not attached to the life of a particular mining title or titles but applied to all mining titles granted to, or operated by, or on behalf of, GEMCO on Groote Eylandt.

• [18] Mr Bruce Fadelli is one of the three independent members of the Management Committee of GEAT. In his affidavit in support of this application he explained the financial consequences for the Trust of compromising the Proceeding in accordance with the terms proposed in the Heads of Agreement and the factors that persuaded the members of the Management Committee to agree to that compromise.
• [19] [Redacted as commercial in confidence].
• [20] To put this in context, Mr Fadelli compared the Trust's likely royalty income stream if it were to lose the Proceeding, as against it achieving complete success in the Proceeding. In making that comparison, Mr Fadelli identified a fundamental difference. It was that if GEAT were to lose the Proceeding, its royalty income would be confined to the ore extracted from the Western mining titles and they had an estimated finite life of approximately five financial years from 1 July 2025. On the other hand, Mr Fadelli said that if GEAT were to be wholly successful in the Proceeding, the Trust could expect to receive royalties from all the ore mined on, and despatched from, Groote Eylandt. Moreover, because this allowed for the mixing of ores from different geographic regions on the island, GEMCO's explorations had indicated that the productive life of the total ore body on Groote Eylandt was likely to be extended by five years.
• [21] [Redacted as commercial in confidence].
• [22] [Redacted as commercial in confidence].
• [23] [Redacted as commercial in confidence].
• [24] In addition to this comparison, Mr Fadelli identified the following factors that the Management Committee had taken into account in concluding that the compromise reflected a "reasonable, certain and fair outcome" to the Proceeding:

(a) that since the amount of the reduction in GEAT's royalties is to be paid to the ALC and there is a significant overlap between "the beneficiaries (as defined in the GEAT Trust Deed) and the traditional owners of Groote Eylandt" there will be no loss in the total amount of royalties paid to the "Aboriginal stakeholders" involved;

(b) that GEAT will save the significant legal fees associated with the trial and any likely appeal or appeals in the Proceeding;

(c) that the compromise will promote community harmony on Groote Eylandt as it will demonstrate to the community that both the ALC and GEAT can work together to achieve the best outcome possible for the inhabitants of the island; and

(d) that it will it encourage a stronger working relationship between the ALC and GEAT.

• [25] Mr Fadelli annexed to his affidavit an advice that GEAT's Management Committee had received from Mr Ian Robertson-Clark SC. Mr Robertson-Clark acted for GEAT in the Proceeding and the mediation that led to its compromise. He was also involved in settling the Heads of Agreement which recorded the terms of that compromise.
• [26] In his advice Mr Robertson-Clark opined that the compromise was "reasonable, just and equitable". While he based that conclusion on essentially the same matters as Mr Fadelli did in his affidavit, he provided some additional insight on at least two factors: the certainty that the compromise provided for GEAT's future royalty income; and the importance of the compromise resulting in no net loss of royalties being paid to the Aboriginal residents of Groote Eylandt.

1. On the first factor, Mr Robertson-Clark opined that the reduction from 1.16% to 1.0% of the net gross realisation value of the ore despatched from Groote Eylandt by GEMCO was "financially advantageous to GEAT to be certain of the future revenue stream" provided by the compromise.[10] In reaching this conclusion he relied on the calculations provided by Mr Fadelli as summarised above.

• [28] On the second factor, Mr Robertson-Clark provided the following elaboration: "Both GEAT and the ALC are fundamentally obligated to the preservation and advancement of [A]boriginal people on Groote Eylandt (GEAT pursuant to its Trust Deed and the ALC by statutory obligation). Although the beneficiaries (under the GEAT Trust Deed) of GEAT and the ALC are not synonymous, there is a high degree of commonality. Accordingly, the reduction in the rate of royalty paid to GEAT but re-directed to the ALC is consistent with the objects of the charitable trust that is administered by GEAT's Management Committee. There is no loss of total royalty payments by GEMCO to aboriginal stakeholders of Groote Eylandt."
• [29] Mr Robertson-Clark concluded his advice by contrasting what would likely occur if GEAT were to proceed to trial and beyond in the Proceeding, as follows: "...the disputation between [A]boriginal communities would continue, funds that might be used for their mutual advancement would be diverted and the outcome for either of them cannot be guaranteed. I say this notwithstanding my view of the merits of GEAT's contractual position."

• [30] The general principles relevant to an application for a court's advice under rule 54 of the Supreme Court Rules NT, or its equivalents, were reviewed in GEAT No 1[11] and GEAT No 2.[12] In brief summary, an application of that kind involves an exceptional jurisdiction,[13] the advice given is directed as much to the protection of the trust as the trustee, all the more so where the trust concerned is a charitable trust,[14] and the only qualification necessary to obtain the advice is that "the applicant must point to the existence of a question respecting the management or administration of the trust property or a question respecting the interpretation of the trust instrument".[15]

1. This application meets the latter qualification because it concerns the management of trust property, namely GEAT's royalty income stream. However, it involves somewhat different considerations to those that applied in GEAT's earlier applications which, among other things, sought advice on whether it was proper for it to defend the Proceeding. In that instance, the Court is required to consider "likely success in proceedings or quantum of recovery" and the test is whether defending the proceeding "...is proper or can be justified having regard to the best interests of those to whom fiduciary duties are owed".[16]
2. However, this application is not of that kind. Instead, it is more analogous to one of the other categories of applications mentioned by the majority in Wigmans, namely an application to approve a compromise of a claim made by a person under disability. The authorities cited by their Honours in Wigmans with respect to that kind of application reveal the following principles.[17] First, the Court must consider for itself whether the compromise will be beneficial to the persons concerned.[18] Secondly, the jurisdiction is protective in nature.[19] Thirdly, the pertinent question is whether "the certainty of obtaining the compromise sum is significantly outweighed by the uncertain prospect of obtaining more by rejecting the compromise after taking into account the risk of obtaining less".[20] Fourthly, in answering that question, "significant weight will be given to the opinions of the applicant's legal advisers....".[21] Finally, it is not the role of the Court to decide whether the compromise is one that it would have made but rather whether it ought to be approved.[22]

• [33] In my view, the compromise of the Proceeding in the terms set out in the Heads of Agreement comfortably meets all of the principles set out above. As both Mr Fadelli, on behalf of the Management Committee, and Mr Robertson-Clark, as GEAT's legal adviser, have explained, the compromise achieves a reasonable balance between the longer term delay, expense and risk (albeit small), associated with GEAT pursuing its defence in the Proceeding to a successful conclusion; and the present day certainty the compromise presents by securing and extending its royalty income stream.
• [34] Furthermore, as they also explain, the compromise does not result in any net loss of funds to the Anindilyakwa people of Groote Eylandt because both GEAT and the ALC ultimately act for their benefit, and it provides that the reduction in GEAT's royalty income is to be paid to the ALC. Finally, and no less importantly, community harmony is likely to result from the compromise.
• [35] For all these reasons I consider that the compromise of the Proceeding is, relevantly, both beneficial and protective and ought to be approved.

[1] Groote Eylandt Aboriginal Trust Incorporated v Attorney-General of the Northern Territory (No 2) (GEAT No 2) [2024] NTSC 87.

[2] In early October 2025 GEAT was given leave to add two new paragraphs to its original summons seeking advice in respect of two matters:

(e) whether GEAT, in its capacity as trustee of the Trust is justified in entering into the Heads of Agreement between it, GEMCO and the ALC.

(f) whether GEAT in the same capacity is justified in entering into the Variation Agreement.

However, in its written submissions in support of this application, GEAT sought leave to further amend its original summons to substitute the above with an application for approval of compromise of the Proceeding in these terms. Since its application for leave to further amend was not opposed by the Attorney General, that leave has been granted.

[3] This history of Groote Eylandt, its Aboriginal inhabitants, GEMCO's mining operations and the GEAT Royalty Agreement has been extracted from the judgments in: Flynn v Mamarika (Mamarika) [1996] NTSC 16; (1996) 130 FLR 218 at 219 to 220; GEAT v Deloitte, Touche Tohmatsu & Ors [No 2] [2017] NTSC 04 (Deloitte) at [33] to [85]; and GEAT v Attorney-General of the Northern Territory [2024] NTSC 83 (GEAT No 1) at [4] to [7].

[4] This acronym is intended to include the Church Missionary Society of Australia and Tasmania and the Church Missionary Society Trust Ltd who are variously mentioned in Mamarika at 219 to 220.

[7] A detailed review of the terms of the GEAT Trust Deed in its various iterations appears in Deloitte at [54] to [88].

[8] Summarised in GEAT No 1 at [4] to [11].

[9] Summarised in GEAT No 1 at [12] to [13].

1. [10] In his advice Mr Robertson-Clark explained that once certain costs and expenses were deducted, 1.25% of the gross realisation value of the ore despatched from Groote Eylandt, as provided for in the original GEAT Royalty Agreement, was equivalent to 1.16% of the net gross realisation value of that ore.

[11] [2024] NTSC 84 at [28] to [35].

[12] [2024] NTSC 87 at [9] to [15].

[14] See GEAT No 1 at [29] and GEAT 2 at [11].

1. [16] See Wigmans v AMP Ltd (Wigmans) (2021) 270 CLR 623, [2021] HCA 7 at [112] per Gageler, Gordon and Edelman JJ, and see also Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66, [2008] HCA 42 at [44]- [45] and GEAT No 1 at [32].

[18] See Permanent Trustee Co Ltd v Mills [2007] NSWSC 336; (2007) 71 NSWLR 1 at 5 [29] per Hammerschlag J.

1. [19] See Fisher by her tutor Fisher v Marin [2008] NSWSC 1357 per Rotham J.
2. [20] See Elderfield (by her litigation guardian Visentin) v Transport Accident Commission (2010) 55 MVR 206; [2010] VSC 116 at [20] per Robson J.

3. [21] See Stephens-Sidebottom v Victoria (Department of Education and Early Childhood Development) [2011] FCA 893 per Tracey J.
4. [22] See Fairhurst (bht NSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388 per Hallen AsJ.