Save Our Rail NSW Inc v State of New South Wales by the Minister administering Transport for New South Wales

EX TEMPORE Judgment Introduction 1This matter comes before the Court by way of summons which was filed on 19 December 2014 and has been the subject of submissions on 23 and 24 December. The matter is not without its complexities, but I am in a position to make a determination on the principal questions raised by the summons. This judgment will of necessity be a short one. 2The question essentially involves an interpretation of the Transport Administration Act 1988 (NSW) (the Act), the Growth Centres (Development Corporation) Act 1974 (NSW) (the Growth Centres Act) and, to a lesser extent, the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Acquisition Act). The context is the proposed changes to be made to transport arrangements by rail in and to the city of Newcastle as part of a major development project. I am not concerned with whether the project is a good one or a bad one; nor am I concerned with the wisdom or otherwise of removing railway tracks which the project in part involves. My role is entirely limited to construing the relevant legislation in the context of particular agreements which have been entered into by several governmental agencies, the terms of which, connected to the closure of part of the railway line between Sydney and Newcastle entailing removal of railway track, are the subject of complaints by the plaintiff. 3The plaintiff is an organisation comprising some 200 persons and is perhaps supported by many more. There is no controversy as to its status to undertake these proceedings and I am unconcerned therefore with its scope, purpose or membership. It is simply a litigant. The same must be said of the defendants. These comprise the State of New South Wales, Transport for New South Wales, the Rail Corporation of New South Wales (the Corporation) and the Hunter Development Corporation (HDC). The latter three are, of course, government agencies. Again, I am not concerned with their status. They are simply parties before the Court, just the same as any other parties. 4Although particular forms of relief are claimed in the amended summons, in substance the plaintiff claims that the transfer (to attempt a neutral term) to HDC of land owned by the Corporation is invalid because of the provisions of s 99A of the Act. As argument developed, the issue arose whether, assuming transfer of the land to HDC was lawful, HDC was prohibited by that provision from the envisaged removal of railway track and associated infrastructure. So far as is relevant, s 99A provides - 99A Closure and disposal of railway lines (1) A rail infrastructure owner must not, unless authorised by an Act of Parliament, close a railway line. (2) For the purposes of this section, a railway line is closed if the land concerned is sold or otherwise disposed of or the railway tracks and other works concerned are removed. It is necessary to refer also to s 5 of the Act providing the following definitions - rail infrastructure facilities: (a) includes railway track, associated track structures, over track structures, cuttings, drainage works, track support earthworks and fences, tunnels, bridges, level crossings, service roads, signalling systems, train control systems, communication systems, overhead power supply systems, power and communication cables, and associated works, buildings, plant, machinery and equipment, but (b) does not include any stations, platforms, rolling stock, rolling stock maintenance facilities, office buildings or housing, freight centres or depots, private sidings or spur lines connected to premises not vested in or owned by or managed or controlled by a rail infrastructure owner. rail infrastructure owner means: (a) in the case of any rail infrastructure facilities that are managed or controlled by TfNSW for the purposes of exercising its functions under this Act, TfNSW, or (b) in the case of any rail infrastructure facilities that are subject to an ARTC lease or licence or are installed, established or replaced by ARTC in or on land subject to an ARTC lease or licence, ARTC, or (b1) (Repealed) (c) in any other case, the person in whom ownership of rail infrastructure facilities is vested by or under this Act. 5There has been no Act of Parliament. The first question that arises, therefore, is whether the transfer from the Corporation of the land involved in the Newcastle rail redevelopment constituted a closure of a railway line within the meaning of s 99A and was thus invalid. If it is not such a transfer, the second question is whether HDC is (or will become) a "rail infrastructure owner" and thus cannot undertake the proposed removal of "the railway tracks and other works concerned" without being authorised by statute. The mode of transfer 6The transfer occurred or will occur by virtue of procedures undertaken in compliance with the Land Acquisition Act which provides for compulsory acquisition of land, inter alia, by governmental agencies. The process, it appears, commenced in the technical sense (although no doubt it was long envisaged to occur) when the Minister for Planning on 17 December 2014 directed HDC - "(a) pursuant to section 9 of [the Growth Centres Act], promptly [to] acquire the land specified in the Schedule ... from [the Corporation] by compulsory process in accordance with the [Acquisition Act ]; (b) Pursuant to section 7 of [the Growth Centres Act] acquire anu fixtures, fitting, improvements or rail infrastructure ... located on the Land and not forming part of the Land as may be necessary or expedient ... (c) ..." The Minister for Transport on 18 December 2014 directed the chief executive of the Corporation to exercise the following functions - "(a) Pursuant to clause 2D of schedule 8A of the ... Act, sell to [HDC] all rail infrastructure facilities located on land specified in the Schedule owned by [the Corporation]; and (b) Pursuant to section 30(1) of the [Acquisition Act] enter into an agreement with [HDC] in relation to the compulsory acquisition of the Land by [HDC]." 7Clause 2D of Schedule 6A to the Act broadly speaking gives the Corporation, as an "owner", power to sell or otherwise deal with "rail infrastructure facilities" that it owns. Nowhere in the Act is a direction by the Minister made a formal or legal requirement for the exercise by Rail Corporation of this power. No doubt there are some other arrangements which made this process necessary. 8In substance, the Acquisition Act envisages two forms of compulsory acquisition. One is by a process which does not depend on consent and the other by a process which envisages consent as to certain matters. The Corporation was directed to enter into an agreement with HDC under s 30(1) of the Acquisition Act - 30 Compulsory acquisition with consent of owners (1) An authority of the State and the owners of land may agree in writing that the land be compulsorily acquired by that authority. (2) The provisions of Division 1 (Pre-acquisition procedures) and Part 3 (Compensation for acquisition of land) do not apply to any such compulsory acquisition if the owners have agreed in writing on all relevant matters concerning the compulsory acquisition and the compensation to be paid for the acquisition. It is important to note that the fact of the agreement does not change the character of the transaction: it remains a compulsory acquisition, but the requirements specified in s 30(2) no longer apply. The mere consent or agreement under s 30 does not amount to any disposition or divestment, let alone sale, by an owner of the land involved in the compulsory acquisition. Was the land disposed of? 9There is no doubt that the Corporation has or shortly will be divested of its ownership of the land involved in the Newcastle development. The question is whether, when that is done by compulsory acquisition, it is "sold or otherwise disposed of" within the meaning of the definition of closure in s 99A(2) of the Act. 10In Henty House Pty Ltd (In Voluntary Liquidation) v Federal Commissioner of Taxation [1953] HCA 54; (1953) 88 CLR 141, the question arose whether certain provisions of the taxation law that applied where depreciated property was disposed of, lost or destroyed also applied where the property had been compulsorily acquired by the Government. It was argued (the other categories being inapplicable) "disposed of" was also inapplicable, as it refers only to a voluntary disposition. Williams ACJ, Webb, Kitto and Taylor JJ said - "[7] ... No doubt the notion primarily conveyed by the words "disposed of" is the notion of a disposition by the taxpayer; but it is not necessarily so confined, and the use of the passive voice, without specific words of restriction referring to the person by whose act the disposal takes place, leaves ample room for a construction in keeping with the general tenour of the section, and with its place in the scheme which ... [the relevant sections] provide. The entire expression "disposed of, lost or destroyed" is apt to embrace every event by which property ceases to be available to the taxpayer for use for the purpose of producing assessable income, either because it ceases to be his, or because it ceases to be physically accessible to him, or because it ceases to exist. In the context of ... [the section] there is ample reason for rejecting a narrower construction. In particular, the words "is disposed of" are wide enough to cover all forms of alienation, as Dixon and Fullagar JJ. remarked in Federal Commissioner of Taxation v. Wade [1951] HCA 66; (1951) 84 CLR 105, at p 110 and they should be understood as meaning no less than "becomes alienated from the taxpayer", whether it is by him or by another that the act of alienation is done. Neither the words themselves nor the setting in which they appear afford any support for the view that cases of involuntary alienation fall outside their meaning." 11Fullager J said - "2. The term "disposed of" is not a technical term, and its "ordinary" or "popular" meaning does not, to my mind, cover a case in which a person is deprived of his property against his will or without his consent. If A's house were compulsorily acquired by the Crown or by a public authority, he would not say "I have disposed of my house" or "My house has been disposed of". The idea of ordering, managing, controlling, arranging, the idea of the exercise of an existing power over a thing, is generally inherent in the word "dispose" itself, and this essential idea is not lost when the word is used with a preposition to denote an act of alienation or creation of a new interest in property. 3. However, I would not deny that the words "disposed of" may, in an appropriate context, properly be given a wider meaning than what I regard as their normal meaning. In the present case we have a provision for adjustment which may operate either in favour of the taxpayer or in favour of the revenue. One would certainly expect to find all cases of alienation covered ..." The ordinary meaning of the phrase "disposed of" is, of course, a question of fact but I would respectfully agree with Fullager J's remarks in this respect. 12However, as the quoted passages make clear, the meaning of the phrase is to be gathered from the context in which it appears. For the purpose of assessing income for a capital gain or for profit on the divestment of property purchased with the intention of making a profit, there are no doubt good, indeed powerful, reasons for regarding disposition, albeit by way of compulsory purchase, as comprehending such a divestment. 13Here, it was fairly argued by Mr Prince for the plaintiff that the plain policy of the section is to remove from any relevant owner the power to deal with certain property in such a way as to effect the closure of a railway line unless the Parliament consents. Whether a line is closed is determined by sub-s 99A(2). Since this must affect the State, which (through its agencies) is the major (if not the only) rail infrastructure owner, the section plainly is designed to govern the conduct by the executive government of its responsibilities so far as closure of railway lines is concerned. Given this policy, the phrase "otherwise disposed" of should be given a broad meaning, as intended to cover "all forms of alienation". 14Mr Prince fairly points out that the use of a compulsory acquisition in the present case, where all parties are consenting and, indeed, at the direction of responsible ministers acting on behalf of the Government of New South Wales, is not by ordinary understanding a transaction of compulsory acquisition where otherwise voluntary agreement would not be forthcoming. It is clear that the Corporation could be required to sell and HDC to purchase the land and obvious that the land is to be compulsorily acquired by HDC in order to bypass the necessity of obtaining an Act of Parliament authorising the transfer. The process smacks of a device to avoid the requirements of s 99A. However, the ability of State instrumentalities to acquire land by compulsory process of the kind used here must be taken to have been known and well understood by the draftsperson and the Parliament that enacted s 99A (and its earlier iterations) and the desirability, if not the necessity, to depart from ordinary usage to encompass the wider meaning evident. I am not satisfied that context requires the phrase "or otherwise disposed of" to be given a meaning so markedly differing from ordinary usage as to cover divestment by compulsory acquisition. Accordingly, although the compulsory process avoids the need for Parliamentary consent, this is because s 99A permits it. 15It has been submitted by counsel on behalf of the defendants that, even if, for the purposes of s 99A of the Act, a disposition of land is effected where it is compulsorily acquired, s 8 of the Acquisition Act has the effect of giving preemptive effect to such an acquisition, rendering the prerequisite of Parliamentary authorisation unnecessary, relying on Hawkesbury City Council v Foster and anor (1997) 97 LGERA 12 and Tauszik v Gosford City Council [2006] NSWCA 193; (2006) 146 LGERA 428. It has not been necessary for me to deal with this argument, given my view of the meaning of the phrase "disposed of". 16A distinction between acquisition by agreement on the one hand and compulsory process on the other is made in s 9(1) of the Growth Centres Act - 9 Power to acquire land etc (1) A development corporation may, for the purposes of this Act, acquire land by agreement or by compulsory process in accordance with the Land Acquisition (Just Terms Compensation) Act 1991. 17Mr Prince submitted for the plaintiff that "compulsory process" in this subsection meant a compulsory process in its ordinary and usual sense, where there is no agreement or consent by the person whose property is being acquired. Where there is such agreement or consent as, in reality, is plainly the case here, he submitted that the acquisition occurs "by agreement" and not by "compulsory process". I do not agree with the basis of the distinction Mr Prince sought to make. It seems to me that, although what happened here was in one sense agreed to, it was not done "by agreement" within the meaning of s 9(1), the agreement in question here having been made pursuant to s 30(1) of the Acquisition Act as part of a compulsory process. Section 6(2) of the Growth Centres Act gives certain powers to the Minister but the direction is not in any legal or technical sense a necessary prerequisite for the exercise of its powers under section 9 to acquire land whether by agreement or by compulsory process. The direction does not inform the issues here except as a matter of history. 18Accordingly, I reject the submission that the acquisition by HDC of the land concerned has occurred as the result of a sale or other disposal of the relevant land. The status of HDC 19Merely because s 99A does not prevent in the circumstances the compulsory acquisition of the land concerned does not however end the matter in substantial dispute here, namely the lawfulness of the proposed removal of railtrack and associated facilities. The ensuing question is whether HDC may undertake, directly or by any agent, such activity. This arises because, quite apart from the compulsory acquisition of the Corporation's land, it separately agreed to purchase from the Corporation certain "assets" associated with the railway line on the land. This purchase may have rendered HDC, in its turn, a "rail infrastructure owner" within the meaning of s 99A of the Act. If so, it must not remove any "railway tracks and other works concerned" without the authority of an Act of Parliament. 20The purchase in question was effected by agreement dated 19 December 2014 between the Corporation and the HDC. The assets purchased are listed in the schedule to the agreement and comprise all overhead wiring and cabling associated with providing power to trains, all above ground infrastructure associated with signalling, all lights, bells, boom gates and any associated equipment used to warn the public of oncoming trains, all track inserts between rails which are required to be removed to construct temporary crossings, fencing on the land which is required to be removed to construct the temporary crossings, any overhead wiring portable structure and the pedestrian overbridge lower landing and any steps to be removed to construct temporary crossings at Perkins Street. All these assets are on the land which has been compulsorily acquired. 21There is perhaps a question whether the assets which are the subject of the assets sale agreement are part of the land compulsorily acquired since, in certain circumstances, a fixture becomes part of the land. Whether a fixture is part of the land is not an altogether easy matter to determine in some cases. If I may say so with respect, an extensive discussion of the point in Agripower Barraba Pty Limited v Blomfield [2013] NSWSC 1598 by Black J, says everything that can be usefully be said about the topic. It depends upon a number of particular aspects of the way in which and the purpose for which items become fixed to the land. As it happens, the question of power poles and lighting was the subject of a decision many years ago by Walsh J sitting at first instance in the High Court of Australia in Anthony v The Commonwealth (1973) 47 ALJR 83. His Honour held, in relation to both a power line and a telephone line attached to poles which had been concreted into the land, that they were not fixtures. 22Two considerations lead me to the view that the assets purchased by HDC do not form part of the land: first, the agreement itself assumes that the compulsory acquisition did not cover those items and accordingly, either explicitly or implicitly, the parties agreed that the compulsory process did not attach to those assets; and, secondly, a number of the listed items (such as wires, cables, signals and bells) are, I think, not fixtures in the sense that could make them part of the land. It follows, as it seems to me, that the items, or most of them, in the schedule are chattels. The agreement for their sale, stating merely the agreement to sell on the one hand and the agreement to buy on the other, effects the change in property which the agreement envisages. No further agreement is necessary for that purpose. 23There can be no doubt, I think, that these assets fall within the definition of rail infrastructure facilities as defined in section 3 of the Act, which - (a) includes railway track, associated track structures, over track structures, cuttings, drainage works, track support earthworks and fences, tunnels, bridges, level crossings, service roads, signalling systems, train control systems, communication systems, overhead power supply systems, power and communication cables, and associated works, buildings, plant, machinery and equipment, 24It is therefore necessary to turn to the definition of "rail infrastructure owner" which is, of course, prohibited from closing a line without the authority of an Act of Parliament. Such an owner is defined by the Act as (relevantly) "the person in whom ownership of rail train facilities is vested by or under this Act". It is clear enough, I think, that the facilities have not been "vested by ... this Act." But I am persuaded that they vested "under this Act". This is because the agreement for sale of the assets was entered into by the Corporation by virtue of its authority as "owner" to do so, contained in clause 2D of schedule 6A to the Act. 25An alternative source of power for an agreement of this kind may be found in the Growth Centres Act, s 9 (discussed above) and s 30, which gives a general power to enter into agreements for the purposes of the Act. These provisions provide additional modes by which the sale agreement in this case could be entered into, the latter authorising both the Corporation and HDC to do so. There is nothing in s 99A of the Act which prohibits such an agreement, not involving land, being entered into and being effected to transfer the property. (Insofar as the assets are not land, of course, ownership does not vest by virtue of the Acquisition Act.) If, however, I am right that the agreement is made under the Act, even though it might also have been made under s 30 of the Growth Centres Act, then by virtue of the Corporation's sale of the assets to it, HDC became a rail infrastructure owner within the meaning of s 99A and cannot remove any railway lines or railway tracks without an Act of Parliament authorising it to do so. 26The question whether the agreement which vests the assets in HDC is made under the Act or pursuant to section 30 of the Growth Centres Act is not easy to resolve. However, s 99A of the Act represents a distinct expression by the Parliament of the responsibilities of rail infrastructure owners in relation to the closure and disposal of railway lines. It is a particular section concerning persons in a particular category doing particular things. It seems to me, by the conventional rules of construction, the particular operates despite what might otherwise appear to be a general rule. I do not think the Parliament ought to be taken to have intended to have limited the functions that it kept to itself by virtue of s 99A of the Act (and its earlier equivalents) when it enacted s 30 of the Growth Centres Act. 27It seems to me, therefore, that the sale of the relevant infrastructure by the Corporation and its acquisition by HDC has rendered the latter a "rail infrastructure owner" within the meaning of s 99A of the Act. It follows that without the authority of an Act of Parliament it cannot remove "railway tracks or other works concerned", I take it those relating to the tracks. Conclusion 28It is declared that, by reason of the acquisition of the assets purchased in the asset sale agreement between it and Rail Corporation of New South Wales dated 19 December 2014, the Hunter Development Corporation is a rail infrastructure owner within the meaning of s 99A of the Transport Administration Act 1988 (NSW).