Adelaide Brighton Cement Ltd v Victorian Rail Track [2007] VSCA 10

Introduction

3 The appellant Adelaide Brighton Cement Ltd, brings this appeal to challenge the decision of the Trial Division of this Court dismissing proceedings brought by it against the respondent, Victorian Rail Track.

4 In those proceedings the appellant had made claims concerning certain land acquired by the respondent's predecessors, the Victorian Railway Commissioners, for the purpose of constructing a railway line between the North Geelong Railway Station and a cement works at Fyansford North owned by a predecessor of the plaintiff, The Australian Portland Cement Co Pty Ltd ("the company").

5 As described by the learned trial judge, the appellant's "principal case" was that as successor of the company it had an entitlement under s 17 of the North Geelong to Fyansford Railway Construction Act 1916 (Vic) ("the 1916 Act"), as subsequently amended, to have the above mentioned land transferred to it by the defendant or to be paid compensation in respect of the land or any part of it which is certified by the defendant as being required for railway purposes. In the alternative, the plaintiff claimed that the land was held by the respondent on its behalf as trustee.

6 The learned trial judge did not accept the arguments advanced for the appellant and ordered the proceeding to be dismissed with costs.

Background - factual

7 The learned trial judge in his reasons comprehensively reviewed the history of dealings between the parties and their predecessors and the legislative history. For present purposes it is sufficient to mention the following.

8 In 1916, the company was operating a cement works at Fyansford and had been doing so for a number of years. In that year, its representatives approached the Minister of Railways concerning difficulties in transporting cement and like products from their cement works to the railway station at North Geelong. It appears that at that time the State of Victoria was under considerable financial strain and the construction of several railway lines had been delayed as a result. The company put forward proposals to the Minister which included an offer to contribute to the cost of acquiring the land and the cost of construction of a railway line on the land. The company's proposals were referred to and reviewed by the Railways Standing Committee which in turn made recommendations to the Minister. Agreement was reached which was referred to by the Minister in his second reading speech in respect of the Bill which ultimately became the 1916 Act. The Minister said that as a result of the company's proposals and the recommendations of the committee, it was proposed that the railway line be constructed subject to conditions which would be incorporated into the 1916 Act. The Minister summed up the conditions in the following passage in his second reading speech on the Bill which became the 1916 Act:

"The estimated working expenses, interest, and construction, and everything else required had been computed by the Railways Commissioners, and they have entered into the necessary preliminary conditions that the Railways Standing Committee desire. The first condition was that a sum estimated to be the cost of the survey, should be deposited by the company. That has been lodged. Then the company have to purchase the land at an estimated cost of [sterling]7,000 and they have to provide against any loss for some 15 years. Should any loss occur in any one year the amount of such loss has to be paid. The Railways Standing Committee made several recommendations in connection with this line, and the company has agreed to submit to them.

".... construed as a whole, the 1916 Act demonstrates that the Line and the Land on which it is constructed, were intended by the Victorian Parliament to be the subject of legislative provisions governing the future use and ownership of the Land and the Line, and the obligations and entitlements of the Commissioners and the company with respect thereto. In my view, it is clear that the Victorian Parliament intended that the special provisions of the 1916 Act would prevail over the general provisions of the Railways Act 1915 to the extent of any inconsistency."

9 I will return to the provisions of the 1916 Act, as amended in 1934, later in these reasons.

10 The company deposited [sterling]7,000 with the Treasurer as required by the provisions of the 1916 Act and this money was used to purchase the land. The whole of that amount was ultimately not required for that purpose and the balance was refunded to the company. Ownership of the land was registered in the name of the Board of Land and Works. Also, as required by the 1916 Act[1], the company provided a bank guarantee for the Commissioners to cover a prescribed amount for a period of 15 years from the opening of the railway line[2]. Following the acquisition of the land and the provision of the guarantee, the Board commenced construction of the railway line, which construction was completed by September 1918. The railway line opened for traffic at about that time. Some three years later, the ownership of the land and the line was transferred from the Board to the Commissioners. This was done in conformity with s 39 of the Railways Act 1915. As his Honour noted, the step must have been contemplated at the time of enactment of the 1916 Act because in s 17 of that Act, the critical section to which detailed reference will be made, the Commissioners are treated as the owners of the land and the railway line.

11 Thus, in 1921, legal ownership of the land and railway line was vested in the Commissioners and they held the guarantee that had been provided. It appears that the guarantee was given for 15 years and guaranteed [sterling]29,746 of revenue. The full amount of revenue that was guaranteed was earned during the first eight years of operation[3]. Thus, eight years into its operation, the company had paid for the land and honoured the guarantee.

12 The company and its successors and assigns used the railway line for carriage of goods from the cement works to the North Geelong Railway Station for some 79 years. It paid freight charges to the Commissioners in respect of that carriage of goods. The 1916 Act specified the rates to be charged the company[4]. There is no evidence that those rates were ever altered. In 1997, the appellant, the successor of the company, ceased using the railway line to transport goods from the cement works. It continued to operate from the Fyansford site using road transport until 2001 when the cement works were closed.

Background - legislative

13 There have been several pieces of legislation which have affected the operation of the terms of the 1916 Act. For present purposes the critical pieces of legislation are the North Geelong to Fyansford Railway Construction Act 1934 ("the amending Act") and the Transport Act 1983. The Amending Act introduced a replacement for s 17, the critical section. The Transport Act 1983 repealed both the 1916 Act and the amending Act.

14 The appellant bases its claim in respect of the land upon rights which it alleges that the company was given as stated in s 3 of the amending Act, which relevantly amended s 17 of the 1916 Act. Section 3 was in the following terms:

"17.(1) If at any time after the expiration of the term of the guarantee the revenue of the said line ceases for a period of three years to be sufficient in the opinion of the Commissioners to pay for the maintenance and working expenses of the said line, the Commissioners -

(a) may close for traffic so much of the said line as they may certify under seal is not required by them for railway purposes; and

(b) thereupon may remove the rails fastenings points and crossings sleepers ballast and other materials erections or equipment of the portion of the line so closed but not including the earthworks and not including any fencing which abuts on private property.

(2) Upon the expiration of six calendar months after the date of such closing the Commissioners shall convey or transfer (as the case may be) to the company the land purchased for that portion of the line which has been closed, but if the company is not then in existence or has been wound up and its assets distributed the said land shall remain the property of the Commissioners.

(3) In respect of so much of the land purchased for the railway as is certified under seal by the Commissioners to be required by them for railway purposes, the Commissioners shall pay to the company purchase money or compensation as if the company were the owner of such land; and the provisions of the Lands Compensation Act 1928 shall, so far as the same are applicable and with such adaptations as are necessary, extend and apply to the assessment and payment of compensation for the purposes of this sub-section, and in particular, for the said purposes, in the construction of the said Act unless inconsistent with the context or subject-matter -

"The Board of Land and Works' and 'the Board' shall mean 'the Commissioners'; and 'The Special Act' shall mean this section of this Act:

Provided that the Commissioners shall not be required to pay any purchase money or compensation under this sub-section if the company has ceased to exist or has been wound up and its assets distributed."

15 The Transport Act 1983, as well as repealing the 1916 Act and the amending Act, contained a saving provision. Section 254(2) of the Transport Act provided as follows:

"(2) Except as in this Act expressly or by necessary implication provided

(a) all persons things and circumstances appointed or created by or under any Act which is repealed by this Act or existing or continuing under any such Act immediately before the appointed day shall under and subject to this Act continue to have the same status operation and effect as they respectively would have had if this Act had not been enacted; and

(b) in particular and without affecting the generality of paragraph (a), this Act shall not disturb continuity of status operation or effect of any ... agreement ... compensation ... summons proceeding action and appeal matter pending liability or right made done effected obtained issued granted given presented passed imposed paid fixed accrued incurred or acquired or existing or continuing before the appointed day by or under any Act which is repealed by this Act."

16 The appellant submitted to his Honour that s 254 (2) had the effect of preserving the rights of the successor of the company at that time under s 17 of the 1916 Act because those rights had been obtained by it, had been issued or granted to it, had been acquired by it, or accrued or were continuing rights enjoyed by it under that Act[5].

17 At the time of the 1983 Act, the interpretation of legislation in Victoria was governed by the Acts Interpretation Act 1958 and by the common law. The Acts Interpretation Act provided for the continuation of the operation of any "right privilege obligation or liability acquired accrued or incurred under any enactment so repealed or amended".[6] In the following year, the Interpretation of Legislation Act was enacted, it replacing the Acts Interpretation Act. In the same year the Statute Law Revision Act 1984 repealed s 254 (2) of the Transport Act 1983. The learned trial judge traced in his reasons the complex legislative history from that point on. It is sufficient for present purposes to state that it is common ground that the question whether any rights conferred by s 17 of the 1916 Act as amended in 1934 have been preserved is to be ultimately determined in these proceedings by consideration and application of s 14 of the Interpretation of Legislation Act 1984.

His Honour's decision

18 His Honour came to the conclusion that at the time of the 1983 repeal of the 1916 Act, as amended the then successor of the company did not have any existing right which was saved by s 254(2) of the Transport Act 1983 or by s 14(2)(e) of the Interpretation of Legislation Act 1984 or by the common law.[7] He expressed the view that the

"Section 17 rights do not arise until the happening of the triggering event specified in s 17. That event is the formation by the Commissioners (or their successors or assigns) of the opinion after the expiration of the 15 year guarantee, that the revenue of the Line has ceased for a period of three years to be sufficient to pay for the maintenance and working expenses of the line. It is accepted that this event had not occurred at the time of the repeal in 1983."

19 He went on to conclude that the subsequent repeal of s.254(2) of the Statute Law Revision Act 1984, and the subsequent repeal of that Act by the Statute Law Revision Act 1995 did not have the effect of reviving rights under s 17 which had been abolished by the 1983 repeal. That conclusion is not challenged.

20 His Honour then considered the alternative trust claim. It had been put on behalf of the plaintiff company that if the s 17 rights had been abolished by legislation, nonetheless it would be inequitable for the defendant to deny the plaintiff an interest in the land; and that, by the mechanism of one of the kinds following, such an inequitable outcome was prevented. Thus -

1. A "Quistclose" trust, on the basis that the land was acquired by the Commissioners in circumstances which gave rise to a trust in favour of the company and, because the purpose of the "primary" trust no longer existed, a "secondary" resulting trust arose.[8]

2. Payment by the company of the whole of the purchase price of the land, together with registration of the land in the name of the Commissioners, gave rise to a "conditional resulting trust" under which the Commissioners held the land on a resulting trust for the company subject to the terms of the 1916 Act.[9]

3. Notwithstanding the repeal of the 1916 Act, it would be unconscionable for the defendant to be allowed to rely upon its legal ownership of the land;[10] and that a constructive trust should be imposed.

21 There was an issue as to the appropriate form of relief because of the fact that the land was the subject of a lease and sublease making it difficult, if not impossible, for the land to be transferred to the plaintiff. The plaintiff sought compensation as alternative relief consequent on the declaration of any trust.[11]

22 Accepting that the result might appear to be unjust, and that the result might have been different had the s 17 rights been the subject of a private agreement, arrangement or understanding, his Honour took the view that it was not necessary to consider whether the elements of the trust contended for had been established. He said:

"I accept the submission put on behalf of the defendant that the sole repository of the contingent entitlement which the Company and its successors and assign had to obtain a transfer of the Land was contained in section 17 of the 1916 Act. Accordingly, that contingent entitlement was at all times subject to the risk or hazard that Parliament might make amendments with respect to it, as was done by the 1934 Act and the 1961 Act or might extinguish it altogether by repeal as was done by the repeal in 1983."

23 Later, his Honour[12] in commenting on the 1916 Act said that it

"144 ... comprehensively recorded the rights, entitlements and obligations of the Company and the Commissioners in the event that the Company chose to make the [sterling]7,000 deposit referred to in section 8 of the 1916 Act. The Company did not have to accept the position that its contingent entitlement to a transfer of the Land was contained in the statute. It could have insisted, as a condition of making the deposit, that a private agreement be made with the Commissioners which imposed on them the obligation to transfer the Land if the Line was closed. If that were done, termination or variation of such agreement would be a consensual matter."

"145. In my view, by making the deposit of [sterling]7,000 as provided for in section 8 of the 1916 Act, the Company chose to participate in the statutory scheme provided for in the 1916 Act. The Company was not obliged by the 1916 Act to make the [sterling]7,000 deposit. If it did not do so, then the Board would not have constructed the Line and the provisions of the 1916 Act, whilst in force, would have had no operation.

146. It follows that, by making the deposit of [sterling]7,000, the company exposed itself to the risk or hazard to which I have referred - that Parliament might act so as to amend or repeal any of the provisions of the 1916 Act. This is what occurred. It would be inconsistent with the right of Parliament to amend or repeal legislation that it could extinguish the s 17 rights by the repeal, and still be subject to the very same rights as conditions attaching to a trust or other remedial equity. ..."

The extinguishment issue - submission on appeal

25 Counsel for the appellant defined and analysed the rights said to be given by s 17 of the 1934 Act.

26 Counsel submitted that when the circumstances referred to in section 17 (1) arose, the Commissioners were under an obligation to declare the railway closed, certify that the line was no longer required for railway purposes (if that was the case) and transfer the land to the appellant after removal of the infrastructure. Alternatively, they were obliged to pay the appellant compensation in respect of any part of the land that was certified as being required for railway purposes. Counsel argued that the relevant circumstances were when the line ceased to

27 Counsel argued that the situation was one where the nature of the power and the conditions and circumstances under which it was to be exercised gave rise to a duty to exercise the power when called upon to do so[14]. The power was described as a power to place the appellant (or its predecessors) in possession of property which had been acquired with funding provided by the company in circumstances where the original purpose for which the property had been acquired had been exhausted and the interests of the Commissioners and their successors protected.

28 Counsel also submitted that the circumstances were such that whatever discretion there may have been in the Commissioners, it no longer remained when there was only one conclusion open on the question whether the revenue from the line was sufficient to pay for its maintenance and its working expenses. The line ceased to generate revenue in 1997 and for the following three years. As a result, the respondent had a duty to decide whether the section 17 (1) circumstances had arisen and, because only one conclusion was open on that issue, had a duty to decide to close so much of the line as was not required for railway purposes. In those circumstances, counsel submitted that there was no residual discretion to refrain from certifying whether the line was or was not required for railway purposes. Thus, it was said, the Commissioners were under an obligation to grant the certificate and close the relevant part of the line. In respect of those matters, counsel submitted that the inactivity over the previous eight years showed that the respondent had decided that the revenue of the line was not sufficient to pay for its maintenance and working expenses and had decided to close the line. That decision having been made, it remained for the respondent to certify under seal and in the circumstances there was no residual discretion to refrain from doing so.[15]

29 An alternative argument was also put. Counsel submitted that once the line had ceased to be used for goods traffic and had ceased to generate revenue for three years, the respondent was under an obligation to consider the matters specified in section 17 (1) and the appellant had the right to have the respondent consider and decide upon those matters.

30 Turning to the issue of the rights of the appellant, counsel for the appellant submitted that its rights, and those of its predecessors, were to have the Commissioners and their successors exercise the power conferred by section 17 of the 1916 Act (as amended). That power carried with it a duty to exercise it in a manner that protected the interests of the appellant and its predecessors. Once the company had deposited the prescribed amount, which was used to purchase the land, and once the bank guarantee was provided, the Commissioners were under duty, in the event of a shortfall in revenue from the line for the purposes described in the section, to close the line for traffic, to determine that the land was no longer required for railway purposes and to remove its infrastructure and, after six months had expired, to convey or transfer the land to the original company or its successors.

31 With the enactment of the 1934 Act, counsel submitted, the Commissioners were under a duty, in the event of a shortfall in revenue from the line (as defined) to certify that the land was or was not required for railway purposes, to close the traffic on the part of the line not required for railway purposes and to either transfer the land to the successor company or compensate that company in respect of land retained for railway purposes. Counsel submitted that the rights of the company were the correlative of the obligations of the Commissioner.

32 As to the survival of the appellant's rights under the 1916 Act, counsel for the appellant submitted that the rights of the appellant and its predecessors were acquired when the company lodged the $7,000 with the Treasury, when that money was used to purchase the land and when the bank guarantee was provided, and was also subject to the contingencies above-mentioned.

33 Counsel submitted that the rights were preserved by the saving provisions in the relevant repealing statutes because they were rights acquired. Counsel submitted that critical distinctions are to be drawn when considering the effect of the repeal of a statute on pre-existing rights. Counsel identified two situations:

• the situation where, on the one hand, what is claimed to have survived repeal is a right [16] and, on the other hand, what is claimed is a mere hope of receiving a benefit or favourable treatment [17], and

• the situation where, on the one hand the right asserted could have vested in any person or any member of a class of persons who met specified criteria[18] and on the other hand, it is held by a defined person[19].

34 Counsel argued that the rights were not fully formed because they waited on the happening of the events described in the provisions, namely, the inadequacy of revenue of the line for a period of three years (to pay for maintenance and working expenses). Not being fully formed they should be described as inchoate rights. They could also be described as contingent rights because they depended for their realisation and enforcement on the happening of some event.

35 Counsel submitted that the rights of the company and its successors arose from defined facts that had occurred before the repeal of the 1916 Act. In particular, they arose from the deposit of the $7,000 with the Treasurer and the provision of the bank guarantee. It was put that the company's own acts had the result of conferring inchoate rights on the company under section 17. Those rights were inchoate or conditional, it was put, in that, while they had accrued, they did not vest until the circumstances specified in section 17 occurred. Once the original company had completed its obligations, it was in the situation that it had more than a power to take advantage of an enactment, it had a substantive right, a right vested in it as an individual. The situation was one analogous to that where subsequent events had to occur before a cause of action could be pursued but the cause of action existed. Any steps the company was required to perform were completed with the provision of the deposit money and the guarantee. Those rights had been preserved by the Transport Act 1983 section 254 and the subsequent legislation including s 14 Interpretation of Legislation Act 1984.

36 The principal authority relied upon for the appellant was the case of Re Commissioner for Railways (1996) 2 Qd R 339. In that case, electric cables had been laid down on the land of the Commissioner for Railways. Under s 222 of the Electricity Act 1976 (Qld), this could only be done pursuant to an agreement between the Electricity Authority and the Commissioner for Railways. That section also provided that where such an agreement was made the Commissioner for Railways

"... may require the Electricity Authority to remove or relocate an electric line or other works erected pursuant thereto or pursuant to a determination of the Governor in Council under this section on, under or over railway property in terms of such agreement or determination or of a further agreement and, if there is no contrary provision in the agreement, determination or further agreement, such removal or relocation shall be at the cost of the Electricity Authority."[20]

37 The electric cables had been installed with the consent of the Commissioner for Railways through Queensland Rail. Subsequently the railway authority ceased railway operations on the land and wanted to sell it. It contended that the relevant Electricity Authority should remove the line from the railway land and do so at its expense. The costs were likely to be very substantial.

38 The Electricity Act 1976 (Qld) under which the agreement was made was repealed by the Electricity Act 1994 (Qld). That Act made provision on the issue by leaving the question of who should bear the costs of removal to be dealt with by agreement. The Commissioner for Railways argued that, notwithstanding the repeal of the 1976 Act, he had acquired a right under the Electricity Act 1976 (Qld) to require the respondent to remove the electric lines at its own cost upon agreeing to the laying of the lines under that Act. It was argued that the right was preserved by s 20(2)(c) of the Acts Interpretation Act 1954 (Qld) which provided that the repeal of an Act did not affect a "right ... acquired" under the Act.

39 De Jersey J in considering the issue stated

"For there to be a 'right ... acquired' under the Act, it is not enough that the Commissioner have merely 'the power to take advantage of the enactment', the words used in Abbott. For there to be a 'right ... acquired' there must, in terms of Abbot, be some 'act done towards availing of that right'." ...[21]

40 His Honour noted that the act or circumstance on which the applicant relied in the case before him was the Commissioner's agreement to the laying down of the electric lines under s 222(1)(a), "an agreement which gave rise then to the Commissioner's right to require removal under subsection (1)(b)". His Honour expressed the view that the Commissioner relevantly "took advantage" of the statute by agreeing under s 222(1)(a) to the laying of the electric lines. His Honour said that he "gained" an 'inchoate" ... right to removal of the lines[22], a right which he would assert by communicating his requirement. The right arose by force of subsection (1)(a), upon the agreement to the laying: the circumstance that, to pursue the right, the Commissioner needed to assert his requirement, did not mean that that right was "not a substantive right available for exercise by the Commissioner."[23]

41 During argument on this appeal, it was put to counsel for the appellant that there may be a point of distinction between this case and Re Commissioner for Railways**,** in that in the present case the action required to be taken was not something that was in the hands of the person claiming the right. But Counsel submitted that the Commissioners' obligations and duties in the present case existed in inchoate form from the time that the company made payment and gave a guarantee under s 17. Counsel submitted that the company, having done what the 1916 Act required, the rights set out in s 17 accrued to it as did the obligations imposed upon the Commissioners. Counsel submitted that those rights accrued from the beginning. Counsel submitted that the right was a contingent right - a right to have things done by the Commissioners when the specified contingencies occurred.

42 Counsel for the respondent identified four categories of case. The first category described was one where a right of an individual to take advantage of a statute in the form in which it stood before amendment or repeal did not survive in circumstances where no acts had been done towards availing the individual of that right.[24]

43 Counsel relied in particular on this statement in McDonald v Commissioner of Business Franchises[25]:

"It is not surprising that the courts have recognised such a principle; for to allow the contrary must have deprived amending legislation of much of its effect, at least until those able to have taken - advantage of the Act before its amendment, ceased to matter: e.g., Abbott's Case, at 430-1, Robertson's Case, at 825."

44 The second category which counsel identified was described as that where a fully formed right exists but has not been exercised at the date of the repeal. Counsel argued that Re Commissioner for Railways,[26] relied upon by the appellant, came within this category. At the time of the repeal of the legislation in that case, counsel submitted that the right to require the removal of the wiring was fully formed. It simply had to be exercised and the failure to exercise it did not affect its continued existence after the repeal of the legislation. This, counsel argued, was a category where repeal did not extinguish the right.

45 A third category referred to by counsel was that where facts have occurred giving rise to a cause of action but it is necessary to commence court proceedings to enforce that cause of action. If the cause of action exists, it will survive the repeal of the legislation giving rise to the cause of action provided all that is absent is the failure to get a court decision to enforce it. Counsel emphasised that in that situation the facts had already occurred which gave rise to the cause of action. Counsel cited the following passage as indicating the distinction to be drawn between the present case and the Commissioner for Railways from the judgment of de Jersey J[27]:

"The act or circumstance on which the applicant [the Commissioner] relies here is the Commissioner's agreement to the laying down of the electric lines, under s 222 (1)(a), an agreement which gave rise then to the Commissioner's right to require removal under subs. (1) (b). In my view, the Commissioner relevantly 'took advantage' of this statute by agreeing under s. 222(1)(a) to the laying of the electric lines. He then gained an 'inchoate'...right to the removal of the lines, a right which he would assert by communicating his requirement. The right arose by force of subs. (1) (a), upon the agreement to the laying: that to pursue the right, the Commissioner needed to assert his requirement, does not mean that that right was not a substantive right for exercise by the Commissioner."

Counsel argued that the right of the Commissioner to require removal of the line survived the repeal of the Act in that case because it was based on a term of an agreement that had been entered into before the legislation was repealed. It may also be said, that all necessary events had occurred, save and except for a demand that the lines be removed. Counsel referred to Free Lanka Insurance Co Ltd v Ranasinghe[28] as another example of a case of that kind. There, a person injured in a motor vehicle was held to be entitled to rely upon rights against the insurer under legislation that had been repealed. Again, the events giving rise to the right had occurred prior to the passing of the repealing legislation.

46 Counsel for the respondent argued that a fourth category was one where the facts giving rise to the cause of action had not occurred prior to the repeal but occurred subsequently to that repeal. Two examples were referred to and relied on- Director of Public Works v Ho Po Sang[29] and Robertson v City of Nunawading [1973] VicRp 81; [1973] 1 VR 819, at 825-6. In the Ho Po Sang case, the facts gave rise to a legal right only when and if an administrative discretion had been exercised. The circumstances were that a Crown lessee had applied for renewal of his lease. He had signed a memorandum of agreement for renewal of that lease. That memorandum provided that the lessee was to develop the site by erecting new buildings on it within a specified time. The respondents were tenants and subtenants. The relevant provisions of the applicable ordinance included provisions that if the Director of Public Works gave a rebuilding certificate the lessee was entitled to call on those in occupation to quit. The lessee had applied for a rebuilding certificate and on 20 July 1956, the Director notified him of his intention to give a certificate. Having received that notification, the lessee in compliance with the Ordinance served notices of the Director's intention on the tenants. They then exercised their right under the Ordinance to appeal by way of petition to the Governor in Council. The relevant provisions were repealed as from 9 April 1957. The Director and the lessee, however, purported to continue with the procedures prescribed in the repealed provisions. In particular, the Director purported to give the lessee a rebuilding certificate and the lessee served notice to quit relying on the Ordinance provisions on all the persons on occupation. The tenants and subtenants brought the proceedings arguing that the Director had no legal authority to issue a rebuilding certificate. Their Lordships, in comparing the case before them with the case of Hamilton Gell v White,[30] identified the distinction relied upon by the respondent to this appeal in the following terms:

"The difference between that case and the present is that in that case a right existed and the investigation, which was unaffected, was an investigation in respect of it; whereas in the present case no right existed or had accrued, and the intended investigation which had not taken place before the time of the repeal (i.e., the consideration by the Governor in Council was an investigation in order to decide whether a right should or should not be given. It was not itself a right or privilege which was preserved by the Interpretation Ordinance)[31]."

Counsel for the respondents submitted that in this case, until the line was no longer being used commercially for the transport of products of the cement works, no right came into existence because existence of those facts were necessary to establish the right. Counsel submitted that that situation should be contrasted with the situation dealt with in, for example, in Re Commissioner for Railways[32] where an established right existed but had not been exercised at the date the legislation was repealed.

47 Counsel for the respondent was critical of the use of expressions such as "inchoate rights". Counsel argued that rights described as "inchoate rights" had only survived the repeal of legislation in circumstances where the facts had already occurred giving rise to a cause of action and all that was needed was a decision by a court or tribunal for the enforcement of that cause of action. Counsel argued that the "inchoate right" which depended upon facts which are yet to occur did not survive the repeal of the legislation on which it was said to arise. I agree that calling a right an "inchoate right" does not assist in resolving the question whether an alleged right has survived repealing legislation.

48 Counsel submitted that in the present case any rights of the appellant depended on something happening in the future which might never happen. Thus the situation was one where, on the authorities, the rights did not survive the repeal of the 1934 Act.

49 In my view the analysis put forward by the respondent should be accepted. It is true that s 17 specifically benefited the company (and its successors). In addition, the effect of s 17 was to give the company the right to benefits under the statute. But that right was dependant on certain events and circumstances occurring. Thus, at its highest, s 17 conferred no more than a right to take advantage of the statute if those events occurred.

50 In the present case plainly the company had complied with all of its obligations under s 17. But before any entitlement to transfer of the land could arise, at least the following had to happen:

1. The Commissioners had to form the opinion that over a three year period the revenue was insufficient for maintenance and working expenses.

2. The Commissioners had to close the line to traffic.

3. The Commissioners had to determine that the land was no longer required for rail purposes.

51 Those opinions and determinations having been made and the railway line having been closed, the Commissioners were obliged to transfer the land to the company but were not obliged to do so until six months had elapsed from the determination that the land was no longer required for rail purposes.

52 Consistently with the authorities in this area, if the Commissioners had formed the necessary opinion, closed the line and made the necessary determination before the legislation was repealed, the company would have had a right enforceable by a court. Prior to that point, however, there were events that had to occur and several administrative decisions to be made, none of which, in my view, the Commissioners were obliged to make in a way favourable to the appellant. For example, assuming that over a three year period the Commissioners formed the opinion that the revenue was insufficient for maintenance and working expenses, they were not obliged to close the line and they were not obliged to determine that the land was no longer required for rail purposes. Further, even if they had formed the opinion that the revenue then being received was insufficient and closed the line, they were not obliged to determine that the land was no longer required for rail purposes[33] - although, if they had determined the contrary they would have been obliged to pay purchase money or compensation in lieu of transferring the land.

53 In a sense the case is one where the right is conditional on facts being established. But the facts to be determined by the Commissioners did not exist prior to the repeal of the legislation. In reality, the company was in the situation of an individual with a right to take advantage of the statute should the events described take place. Because they did not take place before the repeal, the right possessed was not such as could be saved by the relevant saving provisions because there was not a specific right acquired at that time, only a right to take advantage of the statute should a future event occur.[34] Applying that principle is necessary because as the Full Court stated in McDonald v Commissioner of Business Franchises[35] unless the line is drawn to exclude such situations, the saving provisions would effectively deprive repealing legislation of much of its effect.

54 I have come to the conclusion, therefore, that the company had not acquired the alleged right to a transfer or compensation at the time of the repeal of the 1934 Act.

55 As to the alternative argument, namely, that the appellant had the right to have the respondent consider and decide whether and to what extent to close the line for traffic and so certify, similar difficulties arise. While this alternative avoids one of the problems associated with the primary argument, namely, the need for the Commissioners to form the necessary opinions and close the line, it does not overcome the difficulty that the factual basis giving rise to the alleged obligation had not arisen at the time the legislation was repealed. Any such obligation could only arise where the revenue of the line had ceased for a period of three years to be sufficient in the opinions of the Commissioners to pay for the maintenance and working expenses of the line. Thus, on either alternative, the appellant cannot point to any acquired rights under s 17 which would survive the effect of the repealing legislation. I turn to the alternative argument advanced for the appellant - the argument seeking to raise equitable remedies.

The trust alternative

56 Counsel for the appellant submitted that in the absence of a clear intention to exclude the protection that equity might offer, it will continue to operate. Counsel relied upon Minister for Lands & Forest v McPherson[36]. In that case, relief was sought from the forfeiture of a lease which had been granted under a comprehensive statutory system of leases. The party seeking to enforce the forfeiture had argued that the rights were to be determined solely by the legislation and that there was no room for equitable relief. The Court rejected that argument. It expressed the view that clear words are needed to impute to Parliament an intention to exclude the principles and rules of equity.[37]

57 Counsel for the appellant submitted that in the absence of express provisions excluding equitable principles and rules, they continued to operate. Counsel argued that there were three possible forms of trust created by the events that occurred.

1. A resulting trust. Counsel argued that such a trust arose from the fact that the company had supplied funds not by way of loan[38] to enable the purchase of the property to be registered in the name of the Commissioners. Relying on Calverley v Green[39] counsel argued that the Commissioners and their successors held the land subject to a trust in favour of the company. Counsel for the appellant submitted that the circumstances of this case gave rise to a presumption of a resulting trust. Counsel submitted that there was nothing to suggest an intention on the part of the provider which might rebut that presumption. Counsel submitted that, notwithstanding the provisions imposing terms such as the guarantee provision and the charges for access, the presumption of a resulting trust was not rebutted because the equity involved could subsist side by side with these obligations.

2. A Quistclose trust. Counsel submitted that this was a variation on the resulting trust analysis. Counsel submitted that at the time the money was provided, it was provided to enable the Commissioners to purchase the land for the purposes of a railway line to be used in part by the company. Counsel submitted that, such purpose having come to an end, the mutual intention gave rise to a resulting trust - to hold the land in trust for the company, the purpose having failed.[40] Counsel submitted that once the original purpose no longer existed there was a secondary resulting trust.

3. Constructive trust. Counsel submitted that applying unconscionability principles, the circumstances gave rise to a constructive trust from the time the land ceased to be used[41]. Counsel submitted that in the present case it was specifically intended that the Commissioners should not continue to enjoy the benefit of the arrangements if the land ceased to be used as a railway. Counsel argued that the circumstances of retention of the property became unconscionable because it could no longer be used for the original purpose for which monies were paid by the appellant to it.

In the alternative, Counsel submitted that should it be inappropriate to attach a trust to the property because of other interests, there being a lease and sublease, the appropriate remedy would be to order payment of compensation[42].

58 Counsel for the respondent submitted that s 17 of the 1934 Act left no room for any trusts of any kind. Counsel submitted that what was involved was a commercial arrangement. The company wanted a railway line and was prepared to obtain approval for its own benefit by promising to pay [sterling]7,000 and entering into the required guarantee. In return, a railway line was to be built over land which it did not own. It was then to be able to use the line at rates specified. Counsel submitted that the rights of the company and the Commissioners were to be found within the four corners of the Act. Counsel submitted that this contradicted any suggestion that there might be any scope left for the operation of the suggested trusts. He argued also that s 17 placed an additional obstacle in the place of the company obtaining the property because it provided that if the company was wound up or dissolved it would lose any entitlement under s 17 to the trust property. Counsel also submitted that the arrangement described and prescribed by s 17 was inconsistent with a trustee/beneficiary relationship. In particular, the trustee proposed to make money out of the beneficiary from fees paid by the beneficiary. Counsel further submitted that it was not possible for the normal constraints between trustee and beneficiary to exist.

59 Counsel submitted that the parties had entered into an arrangement under which it was intended that their rights be determined by the legislation. It contained detailed provisions about what was to be done and how the matter was to be progressed. It did provide that the property could become that of the company but to graft on to the statutory provision equitable remedies would be to set at nought the commercial arrangement.

60 In my view, there are major difficulties facing the appellant in establishing a trust of one of the kinds suggested. When the arguments advanced in support of the trusts are examined, they focus on particular aspects of the arrangements between the parties and require that other aspects of significance are played down or ignored. In relation to the suggested resulting trust, the appellant concedes that consideration must be given to the intention of the alleged provider and this requires consideration of all aspects of the transaction and the light that examination sheds on its intention. Plainly the money was provided for commercial reasons to which the purchase of the land was incidental. In relation to the alleged Quistclose trust, the argument that the purpose failed requires a very narrow view to be taken of the purpose of the provision of funds. It requires a questionable view of what constitutes failure; realistically the railway line having been used for seventy-nine years, it is difficult to say that the purpose of the transaction failed. As to the suggested constructive trust based on principles of unconscionability, again, the whole transaction and its performance must be examined to determine whether it would be unconscionable to permit the Commissioners to continue to enjoy the benefit of the arrangements by retaining the land if the land ceased to be used as a railway.

61 I have come to the conclusion, however, that it is not necessary to explore all issues concerning the possible forms of trust that were claimed to have arisen because I consider it to be reasonably clear, as the learned trial judge held, that the legislation should be regarded as containing a complete statement of the rights and obligations of the respective parties. It leaves no room for the operation of principles and rules of equity to the extent that they might otherwise create rights for the appellant and respondent and their predecessors except in the context of possible remedies of the enforcement of the rights conferred by the Act. The legislation was a specific Act designed for a single transaction. It went into considerable detail in defining the rights, duties, obligations and liabilities of the parties. What was involved was a commercial arrangement negotiated by the parties and its terms were expressed in this legislation.

62 For the foregoing reasons, the appellant has failed to establish the rights alleged and the appeal should be dismissed.

[1] Section 8 of the 1916 Act.

[2] Section 8 of the 1916 Act.

[3] Second Reading Speech, North Geelong to Fyansford Railway Construction Act 1934.

[4] Two shillings per ton - s 192(1).

[5] At [55].

[6] Acts Interpretation Act 1958 s 7(2)(c).

[7] Paragraph 135.

[8] Citing Re Australian Elizabethan Theatre Trust [1991] FCA 344; (1991) 30 FCR 491.

[9] Dyer v Dyer (1788) 2 Cox 92; Calverley v Green [1984] HCA 81; (1984) 155 CLR 242.

[10] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583.

[11] Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101.

[12] At [144].

[13] As defined in section 3 (1) of the 1916 Act.

[14] Citing Julius v Lord Bishop of Oxford (1880) 5 App Cas 214.

[15] Commissioner of State Revenue (Vic) v Royal Insurance Ltd [1994] HCA 61; (1994) 182 CLR 51, 88.

[16] Citing as an example Free Lanka Insurance v Ranasinghe [1964] AC 541, r 551 -2.

[17] Citing as an example Director of Public Works v Ho Po Sang [1961] 901 at 922 - 6.

[18] Citing Abbott v Minister for Lands (NSW) [1895] AC 425.

[19] Citing Esber v Commonwealth [1992] HCA 20; (1992) 174 CLR 430, 440 - 1.

[20] At 344.

[21] At 339.

[22] Citing Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541552, Esber v Commonwealth at 440.

[23] Citing Director of Public Works v Ho Po Sang above.

[24] Abbott v Minister for Lands [1895] AC 425 at 436; Director of Public Works v Ho Po San [1961] AC 901 at 924; Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541; Total (Australia) Ltd v Registrar of Companies [1969] VicRp 104; [1969] VR 821 at 823; Mathieson v Burton [1971] HCA 4; (1971) 124 CLR 1 at 23; R_obertson v City of Nunawading_ [1973] VicRp 81; [1973] 1 VR 819 at 825-6; Esber v The Commonwealth [1992] HCA 20; (1992) 174 CLR 430 at 440.

[25] [1993] VicRp 95; [1993] 2 VR 632 at 649.

[26] (1996) 2QdR 339.

[27] At 345.

[28] [1964] AC 541.

[29] [1961] AC 901.

[30] [1922] 2 KB 422.

[31] At 926.

[32] At 925.

[33] There could be a viable alternative rail use.

[34] Ogden Industries Pty Ltd v Luca [1967] HCA 30; (1967) 116 CLR 537 at 584.

[35] Above at 649.

[36] (1991) 22 NSWLR 68.

[37] Kirby P at 698 and ff.

[38] Martech Energy Systems Pty Ltd v Bell [2005] VSC 198.

[39] [1984] HCA 81; (1984) 155 CLR 242; in particular Deane J at 266.

[40] Re Australian Elizabethan Theatre Trust [1991] FCA 344; (1991) 30 FCR 491.

[41] Counsel relied in particular upon passages from the judgment of Deane J in Muschinski v Dodds (1984 -1985) [1985] HCA 78; 160 CLR 583, at 614 and 620.

[42] _Giumelli v Giumelli (_1998 - [1999] HCA 10; 1999) 196 CLR 101.