Trustee or Agent PBC
The commentary contained in this section is general. It is not intended to be legal advice or applied uncritically to your specific circumstances. You should seek specific advice that relates to your particular facts and circumstances or the particular facts and circumstances relating to your claim group or PBC.
This page was authored by:
Principal Legal Officer Queensland South Native Title Services Ltd.
Trustees have more powers and discretions than agents. Trustees have an obligation to act in the interests of their beneficiaries (native title holders). Trustee PBCs also have an obligation to prefer the interests of the native title holders as a whole to their own interests or the interests of their family or friends. They can decide how they administer a PBC provided that it is in the interest of the native title holders.
Agents do not have the discretion that a trustee has. An Agent PBC has the same obligation to prefer the interests of the native title holders to their own interests but may only act within the limit of the instructions or authority given by the native title holders.
The most significant differences between trustee and agent PBCs concern:
- Who holds the native title; and
- Who is responsible for actions carried out by the PBC.
In either case the PBC is ultimately responsible to the common law native title holders. This position is also reflected in the NTA and PBC Regulations.
Who holds native title?
A trustee PBC actually holds the native title. With an agency PBC the native title is held by the native title holders themselves. In each case the PBC manages the native title but an agency PBC may only act within the scope of the authority and instructions that the native title holders give to it.
A trustee PBC is entitled ‘to manage the native title rights and interests of the common law holders of those rights and interests’ (PBC Regulation 6(1)(a)).
An agent PBC is only entitled ‘to manage the rights and interests of the common law holders as authorised by the common law holders’ (PBC Regulation 7(1)(b); (author's emphasis).
Practically, this means that:
A trustee PBC can exercise its own independent judgment when making decisions about certain matters. A trustee PBC is still required to consult with and seek the
- consent of the native title group in relation to native title land matters but is not bound to do so for internal operations of the PBC.
- An agency PBC must consult with the native title group not only on matters concerning their native title to land but also in relation to the internal operations of the corporation, such as the day to day administration etc.
Experience shows that a trustee PBC is able to manage the native title interests more efficiently than an agent PBC. This is because the PBC is not required to go back to the native title holders if a decision needs to be made that is outside the scope of its authority or instructions. Having to get instructions each time a decision has to be made that is outside the scope of instructions or authority of the agent PBC can cost time (and perhaps opportunity) and money (in convening and holding a native title holders’ meeting).
How it works
Sections 55 – 57 of the NTA set out that the Federal Court must determine the prescribed body corporate by taking the following steps.
Step 1 – determining whether trustee PBC
- Asking a representative of the native title holders whether they wish to nominate a PBC to hold the native title on trust or not;
- If a nomination for a trustee is made, the PBC is declared to hold the native title as trustee; or
- If a nomination is not made, the native title is declared to be held by the native title holders themselves.
Step 2 – determining non-trustee PBC
- If a trustee PBC is not nominated then the Federal Court may ask the representative of the native title holders to nominate a PBC to carry out the title management functions as an agent on their behalf;
- If a nomination is made, declaring that the PBC is appointed as agent; or
- If a nomination is not made, declaring which body corporate is to carry on the agent functions on the native title holders’ behalf.
If a PBC is not nominated by the native title holders, Regulation 11 of the PBC Regulations enables the Indigenous Land Corporation (ILC) to be made the default agent PBC for an initial mandatory period of 5 years, meaning the ILC manages the functions of the PBC for that period.
Under Regulations 15 and 16 of the PBC Regulations a request may be made by the native title holders for a replacement PBC, meaning they can nominate an existing PBC to hold native title, or register a new PBC.