Millions of dollars in prospective mining royalties have been frozen by an administrator, but a Port Augusta-based group is taking legal action to overturn the situation.

DISPUTE: Former Adnyamathanha Traditional Lands Association chairman and representative of some common law holders Vince Coulthard attended the court hearing in Adelaide.
DISPUTE: Former Adnyamathanha Traditional Lands Association chairman and representative of some common law holders Vince Coulthard attended the court hearing in Adelaide.

First steps have been taken to legally release what could ultimately be millions of dollars in mining royalties that are being withheld from Adnyamathanha community members based around Port Augusta.

Action was launched in the Supreme Court in Adelaide on Thursday before Judge Dart who heard preliminary discussion of an application for an injunction against the activities of the administrator of the Adnyamathanha Traditional Lands Association.

In a long-running wrangle, the administrator, Peter McQuoid, earlier this year asked uranium miner Heathgate Resources and Quasar to withhold royalties until he is given access to the association's Rangelea trust's financial records.

Now Rangelea, backed by some common law holders led by former association chairman Vince Coulthard, has lodged an interlocutory application in the court to disallow Mr McQuoid's instructions to the miners and release the payments to Rangelea amounting to about $260,000 monthly.

Judge Dart adjourned the hearing to July 26 when he will take further submissions on the application.

The miners were represented by legal counsel, Rangelea had its lawyers and Mr McQuoid appeared before the court by telephone link from Queensland.

Mr McQuoid later described the matter as a "preliminary directions hearing", saying all parties would now have the opportunity to read documents and lodge affidavits.

He agreed the matter was heading towards an injunction case.

Meanwhile, Mr Coulthard, who represents some Adnyamathanha common law holders, said Mr McQuoid had frozen the royalties without consulting Native Title holders.

"It is a disgruntled, very small minority advising the administrator. It is time to take appropriate action against this," he said.

He said Rangelea was outside the association's jurisdiction because it was not registered under the Aboriginal Associations and Corporations Act, but was registered under the Australian Securities and Investment Commission.

"The Office of the Registrar of Indigenous Corp[orations and its administrator have stepped out of line here," he said.

"Rangelea has on its books almost 3000 members while the association represents only 800.

"The administrator and the office have not gone back to the people, the common law holders."

Native Title and human rights lawyer Tim Campbell said the legal action on Thursday was the first step towards Rangelea's obtaining an injunction.

"The legal costs could be large because solicitors and barristers are involved and unfortunately it appears that the Adnyamathanha people may have to pay those legal costs indirectly," he said.

"It is a serious legal action and could be resolved by mediation. As far as I understand it I don't believe it has been set down for mediation.

"The matter has been adjourned so that more evidence can be given to the court. Once they get that evidence, it will be set down for argument for trial."

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