Asciano Services Pty Ltd v Chief Commissioner of State Revenue

[2008] HCATrans 288

[2008] HCATrans 288

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S211 of 2008

B e t w e e n -

ASCIANO SERVICES PTY LTD

Appellant

and

CHIEF COMMISSIONER OF STATE REVENUE

Respondent

GUMMOW J
KIRBY  J
HAYNE J
CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 6 AUGUST 2008, AT 11.50 AM

Copyright in the High Court of Australia

MR S.J. GAGELER, SC:   If the Court pleases, I appear with MR J.O. HMELNITSKY for the appellant.  (instructed by Clayton Utz)

MR A.H. SLATER, QC:   If the Court pleases, I appear with my friend, MS R.L. SEIDEN, for the respondent.  (instructed by the Crown Solicitor for New South Wales)

GUMMOW J:   Yes.  There is a change of name to be made, is there not?

MR GAGELER:   Yes, there is, your Honour.  We have sought an order by summons to reflect that change of name, your Honour.  The summons is dated 1 August.

GUMMOW J:   So the name of the appellant should now appear as Asciano Services Proprietary Limited, is that correct?

MR GAGELER:   That is correct.

GUMMOW J:   Yes, Mr Gageler.

MR GAGELER:   Your Honours, this is a fairly short case.  I propose to go first to the Transport Administration Act.  I propose then to go very briefly to the access agreement, and then to the Duties Act, and in the course of doing that rather than at the end to point out the errors which we say appear in the judgment of the various members of the Court of Appeal.  The short form of our submissions would be simply to say that Justice Gzell at first instance was correct for the reasons he gave.

Your Honours, can I go first to the Transport Administration Act, the most relevant form of which is reprint No 4, which I believe your Honours have been provided with.  Reprint No 4, as at 10 April 1997, usefully reflects the form that the Act took at the date of the original access agreement that was entered into between the appellant ‑ then known as National Rail Corporation ‑ and Rail Access Corporation on 1 July 1996.

Your Honours will have seen from the materials that it was the extensions of that 1996 agreement during the period 1 July 2000 to 31 December 2003 that gave rise to the notice of assessment that appears in the appeal book at pages 33 to 35, from which the Commissioner at page 44 disallowed an objection, which then gave rise to the application for review to the Supreme Court which was commenced by the summons that appears at page 2 of the appeal book.

The history of the Transport Administration Act up to 1988, and indeed up to 1 July 1996, is something we have traced in our written submissions at paragraphs 7 to 10. The most significant amendment to the 1988 Act for present purposes was one that was introduced on 1 July 1996, that is, the very date of the access agreement, by the Act we have noted in paragraph 10 of our submissions, that is, the Transport Administration Amendment (Rail Corporatisation and Restructuring) Act 1996.

As your Honours would recognise from the date and from the title, that was an Act that gave effect to aspects of the competition principles agreement which had been entered into the year before, particularly clause 4 which provided for the restructuring of public monopolies, and clause 6 which made provision for access to services provided by significant infrastructure facilities.

The basic scheme of the 1988 Act then so far as is relevant and so far as it was effected by the 1996 Act was to separate the ownership and management of railway infrastructure from the ownership and management of the land on which the railway infrastructure was situated.  The ownership and management of the land remained for the most part vested in State Rail Authority, which itself had been first constituted in 1980 and was at that time the successor to the undertaking of the Commissioner for Railways.

The ownership and management of railway infrastructure became vested in the newly created Rail Access Corporation, which was later to become Rail Infrastructure Corporation by virtue of a further amendment that we have noted in our written submissions at paragraph 14.

KIRBY J:   At the relevant time it was the RAC, not the RIC, I gather?

MR GAGELER:   During the period in question, that is, during the period 1 July 2000 to 31 December 2003, it moved from being RAC to RIC.  So you will see the terms used interchangeably in the submissions and in the judgments below.  But at the time of the 1996 agreement, it was RAC.  Your Honours, if I can take you ‑ ‑ ‑

KIRBY J:   Was this idea of the use of the public infrastructure formerly that of the Commissioner for Railways?  Was that something that did not happen in the old days that then it was only the Commissioner for Railways who used his railway lines and the tunnels and all the other facilities until the competition principles came along and then they began to make the facilities available beyond the public sector into private sector corporations like your client?

MR GAGELER:   Yes.  What you had from 1995 onwards in a variety of industries was an unpacking of functional levels within what was previously a vertically integrated process and this is part of it.

KIRBY J:   Mr Slater refers in his submissions to some old cases about tunnels and other things, but I do not know how quite they came.  I have not looked at those yet.

MR GAGELER:   I am not sure they really help him, but I will say something about them as I move through.

GUMMOW J:   So your central point really is that the Stamp Duties Act did not keep up with these changes.

MR GAGELER:   My central point is that the Stamp Duties Act is simply not directed to an agreement of this nature.  Whether it was intended to be or not, I could not say.

KIRBY J:   Mr Slater’s point is that the Act is expressed in very broad language and it fixes and bites.

MR GAGELER:   It misses, your Honour.  It misses this one.  Your Honours, dealing with State Rail Authority, if I can very quickly go through the provisions.  Section 4 at page 4 of the print that your Honours have constituted State Rail Authority.  Clause 3 of Schedule 7, which appears at page 132, said that it was taken to be:

a continuation of, and the same legal entity –

that had been established in 1980.  Section 5, that appears at page 5, required it to operate railway passenger services and went on to say that it was to:

continue to operate the railway services –

that it had previously provided, and section 8(1) conferred on it a number of “Miscellaneous functions” which included within paragraph (c) to acquire and develop any land.

GUMMOW J:   We do not have this, Mr Gageler.

KIRBY J:   No, you are referring to section – why does this always happen to us?

GUMMOW J:   Why do we get bits and pieces?

MR GAGELER:   No, your Honours, I am assured, have ‑ ‑ ‑

KIRBY J:   Ours jumps from section 3, with definitions, up to section 19A. 

MR GAGELER:   Your Honours ought have this document.

KIRBY J:   I think there are a lot of documents at the end of the Bench.

MR GAGELER:   Yes.  I am so sorry that your Honours did not get it in the short break.

KIRBY J:   Do not worry about that.  We are the last to get the relevant information usually.

MR GAGELER:   Your Honours have not yet missed anything of importance.

GUMMOW J:   We have it now.  It is not your fault, Mr Gageler.  Yes, go on.

MR GAGELER:   I have mentioned section 4.  I have mentioned ‑ ‑ ‑

KIRBY J:   Under Justice Gummow’s authoritarian rule we came back very, very quickly.  Not a minute is to be wasted.

MR GAGELER:   Yes.  I have mentioned section 4, I have mentioned Schedule 7, clause 3, I have mentioned section 5 and I have mentioned section 8(1)(c), all of which deal with the position of State Rail Authority.  I was moving on then, your Honours, to the position of Rail Access Corporation which is dealt with from page 16 onwards.  Your Honours will see at page 16, section 19C constituted Rail Access Corporation as one of a number of rail corporations then being established.  Section 19D set out the objectives of RAC, most relevantly for present purposes those set out in paragraphs (a) and (b), then section 19E at page 18 in subsection (2) said that:

The principal functions of Rail Access Corporation are:

(a)to hold, manage and establish rail infrastructure facilities on behalf of the State, and

(b)to provide persons with access as rail operators to the NSW rail network.

If your Honours look down on the same page to subsection (5), it was said that:

(5)In exercising its functions, Rail Access Corporation must act in accordance with the NSW Rail Access Regime.

KIRBY J:   Is there a definition of “facilities” somewhere?

MR GAGELER:   Yes, if you turn back to page 14 you will see in section 19A a number or relevant definitions:

NSW rail network means the railway lines vested in or owned by Rail Access Corporation (including passing loops and turnouts from those lines and loops and associated rail infrastructure facilities that are so vested or owned). 

There is then a definition of “rail infrastructure facilities” which is too long to read.

KIRBY J:   It may be too long to read, but it is very important to the respondent’s arguments.  The respondents point out that your argument is focused on facilities and at least that has an attraction that that is, as it were, an inchoate right, but when you actually look to how the facilities are defined, they include good old‑fashioned land such as tunnels, bridges, et cetera.

MR GAGELER:   That is the way they characterise them.  We would accept that when you look at what the facilities include, they include some things that are very big and some things that are made of dirt and that is about as far as it goes, your Honours.  There is also a definition of “rail operator” and, relevantly, “rolling stock”.  Section 19B at page 15 then defines the “NSW Rail Access Regime”.

KIRBY J:   Which subsection?

MR GAGELER:   Subsection (1), your Honour, which was to be:

established from time to time by the Minister and approved by the Premier for the purpose of implementing the Competition Principles Agreement in respect of third party access to the NSW rail network by persons as rail operators.

I will come to that in due course.  If I can continue through the Act for just a moment, your Honours will see at page 19 at section 19F said that:

Schedule 6A . . . has effect.

I will come to Schedule 6A in due course.  Section 19J at page 20 provided for the transfer “to a Rail Corporation” which included Rail Access Corporation of specified “assets, rights and liabilities of the State Rail Authority”.  No ministerial order was in evidence in these proceedings.  The agreed fact, however, at page 26 more correctly a fact which stood admitted by virtue of the Supreme Court Rules, was page 26 line 50:

At all material times, the NSW Rail Network was owned by or vested in RIC.

That term being used interchangeably with RAC.  Your Honours will also note that it is recited in the access agreement itself, page 51 of the appeal book, line 30, that RAC was at that stage, that is, 1 July 1996:

the owner . . . the NSW Rail Network.

As I said, I will come to Schedule 6A in a moment.  Can I first deal with the New South Wales Rail Access Regime?  Your Honours will see it in a draft form as an annexure to the Rail Access Agreement from page 179 of the appeal book onwards.  It came to be formally approved on 19 August 1996 and your Honours also I sincerely hope have it in a gazetted form.

GUMMOW J:   Yes, we have it.

MR GAGELER:   If your Honours go to page 4955, you will see Schedule 1 which has a number of tables and table 1 defines the:

Facilities Available For Access Under The Regime.

That is said to be the:

Railway track owned by the Corporation.

Table 2 identifies the:

Facilities Utilised By The Corporation To Facilitate And Control Access To The Facilities In Table 1.

That is said to be the:

Rail Infrastructure Facilities . . . owned, controlled or operated by the Corporation.

Then table 3 identifies:

Other facilities owned, controlled or operated by the Corporation . . . for the purpose of providing Access.

As:

Facilities Used as “Overheads” In Access.

At pages 4950 to 4951, then within the definition clause, your Honours might note the definition of “NSW Rail Network”, clearly reflecting the statutory definition; the definition of “Rail Infrastructure Facilities”, again reflecting the statutory definition but making clear that one is concerned only with those facilities “vesting in the Corporation”.  I am picking up the last words of paragraph (a) of the “Rail Infrastructure Facilities” definition.  Your Honours see the definition of “Rail Operations” and “Rail Operator”, again in the statutory terms.  The definition of “Access”, the first of the definitions your Honours will see:

means access to the NSW Rail Network by persons as Rail Operators involving the use of the Rail Infrastructure Facilities listed in Schedule 1, Table 1 for Rail Operations ‑

and so on.  The operative provisions your Honours will see in clauses 3 and 5 most relevantly.  Clause 3 at page 4952 said that:

The corporation shall, subject to the Regime:

(a)permit Access to the NSW Rail Network;

(b)limit Access to the Rail Infrastructure Facilities listed in Schedule 1, Table 1 for the purpose of Rail Operations –

Clause 5 in sub‑clause 5.1 then said:

Except as required by law, the Corporation must only permit Access through an Agreement.

“Agreement”, I should have taken your Honours to the definition, of course.  That is defined at page 4950 as:

an agreement under which the Corporation grants Access to a Rail Operator. 

Clause 5.2 sets out certain characteristics that the agreement must adhere that.  Your Honours will see those characteristics in the access agreement that was in fact entered into.  Turning then to Schedule 6A of the Transport Administration Act, which begins at page 119 of reprint No 4, your Honours will see in clause 1 a definition of “SRA land” which:

means land owned by, vested in or under the control of the SRA ‑

Then clause 2  at page 119 of schedule 6A says:

RAC is the owner of all rail infrastructure facilities installed in or on land, in or on rivers and other waterways and in or on the beds of rivers and waterways by RAC and of all rail infrastructure facilities vested in or transferred to RAC (whether or not the place on which the facilities are situated is owned by RAC).

Then subclause (2) provides by way of statutory entitlement that:

(2)RAC may, subject to this Act, inspect, operate, repair, replace, maintain, remove . . . or do any other thing that is necessary or appropriate to any of its rail infrastructure facilities that are situated on SRA land or on or in a SRA building to ensure that, in the opinion of RAC, the rail infrastructure facilities are established, held and managed in an efficient, safe and reliable manner.

Then subclause (3) says:

(3)RAC may, subject to –

certain limitations –

sell or otherwise deal with rail infrastructure facilities that it owns.

Your Honours will see complementing those provisions in clause 3(1) another statutory requirement for RAC:

by persons issued with certificates of authority under this Schedule, enter and occupy SRA land . . . for the purpose of exercising its functions including –

that function to which reference is made in clause 2(2).  That is effectively repeated as paragraph 3(1)(a), that is, it has a statutory right to enter the land to:

inspect, operate, repair . . . maintain, remove . . . expand, alter –

et cetera.  All of those things that fall within the definition of “rail infrastructure facilities”.  Now, your Honours, what we say ‑ ‑ ‑

KIRBY J:   In that sense, the facilities are not, as it were, entirely disembodied.  There is quite a lot of attention to what one might say is the hard copy, the actual – the infrastructure is not just a concept or a theory.  It is actual facilities.

MR GAGELER:   It is physical things,  your Honour, but what we say is that the direct statutory effect of those provisions as in the North Shore Gas Case ‑ that I am not proposing to read from ‑ the direct statutory effect is to separate the ownership of the facilities from the ownership of the land on which those facilities might be installed or indeed reinstalled.

CRENNAN J:   Are RIC’s powers of entry pursuant to certificates of authority?

MR GAGELER:   Yes.  RAC’s or RIC’s powers of entry are those that one sees in clause 3, yes.  So it does not by virtue of its ownership of the infrastructure facilities, obtain ownership of any part of the land.

CRENNAN J:   Power of entry.

MR GAGELER:   That is the very simple point that we draw from that statutory scheme.

GUMMOW J:   Schedule 6A, clause 2 says:

(1)RAC is the owner –

That involves some notional severance, does it not, because some of these facilities would otherwise be fixtures, would they not?

MR GAGELER:   Yes, that is the point, your Honour.

GUMMOW J:   It is a form of statutory severance?

MR GAGELER:   That is right.  So if one were simply concerned with the common law, many of these things would be fixtures and thereby become part of the land, but what one has is a statutory regime that creates a separation.  That was not the view of Justice Hodgson.  Justice Hodggon at paragraphs 26 to 29 of his judgment at pages 228 to ‑ ‑ ‑

GUMMOW J:   Just before you go to Justice Hodgson, then having severed the facilities on this clause 2 of section 6A, the legislature had to give some right to get into them.  So it had to give entry rights.

MR GAGELER:   Yes, that is right.

GUMMOW J:   Because otherwise it would have severed, let there would be a trespass before you ‑ ‑ ‑

MR GAGELER:   That is exactly right, yes, and that is what happened.  Really, the existence of the entry right in clause 3(1) emphasises the severance from any property interest in the land.  Your Honours, I said page 228, it is page 288 to 289 at paragraphs 26 to 29. 

KIRBY J:   Are you plunging into the Court of Appeal to criticise them?  Have you finished laying the entire background?

MR GAGELER:   As I said, I want to dip into what the Court of Appeal says from ‑ ‑ ‑

KIRBY J:   You are just putting a little bit of poison in the well early?

MR GAGELER:   No, your Honour, to just destroy the argument as I go so I do not have to come back.  It seems to me the most efficient way of proceeding.  There are strands of reasoning in the Court of Appeal which are not all coincident and want to take the strands as I go.  It is convenient to deal with this strand that appears at paragraphs 26 through to 29 of his Honour’s judgment.  His Honour was there accepting an argument which was put by my learned friend below and which is repeated in his written submissions in paragraphs 26 and 27 before this Court and the submission is that if you look at the things that are rail infrastructure facilities, some of them, tunnels, earthworks, and roads of various sorts, are inherently land, so it is said.

GUMMOW J:   The first question you have to sort out is what you mean by “land”, is it not?  “Land” can mean a portion of the surface of the earth.  It may mean certain rights that the law confers classified as a fee simple sometimes.

MR GAGELER:   That is right, but what “land” does not mean, in any legal sense, is something that is simply very big or made of dirt and that seems to be the error into which his Honour has been led by this submission.  It is common ground that “land”, in the relevant sense, has the meaning that Justice Basten identified by reference to a number of textbooks and that is a three‑dimensional part of the earth.  But the point is that these things do not become land simply by occupying a rather large three‑dimensional part of the earth or by reference to it being made of some particular substance any more, your Honours, than the pipes in the North Shore Gas Case became land because they were permanently buried in the dirt.

Justice Gzell at pages 265 to 267 at first instance but usefully, certainly at the bottom of page 265, paragraph 19, referred to a decision of Justice Walsh sitting at first instance in this court in the case of Anthony v The Commonwealth. That case really quite usefully illustrates the point that a road, that is, the bitumen and the substrata that the bitumen sits upon, can be vested in a polity or a statutory entity separately from and without any need of any part of the land being so vested and Justice Walsh, your Honours might note, at page 87 of 47 ALJR 83, sited a string of cases for that proposition going back to 1896.

HAYNE J:   Just before you part from Justice Hodgson’s judgment, what is the competing possibility that are rejected when his Honour says that they have the character of land and are not deprived of that character?  Presumably there is a choice there expressed between land and some other relevant description.  What is that other relevant description or competing possibility that is in play in this passage of the reasons?

MR GAGELER:   The two alternatives are “land” or “not land”, your Honour.  One could give them another label.  The only label I have ever sought to give them, including before Justice Hodgson when I responded to this submission, was the label of “rail infrastructure facilities”, “things” not “land”.

HAYNE J:   By speaking of “land” or “not land”, which at least intrinsically is not an especially helpful distinction, are you invoking echoes of distinctions between “movables” and “immovables”?

MR GAGELER:   No.

HAYNE J:   Are you invoking distinctions between “realty” and “personality”?  I mean, “land” and “not land” ‑ ‑ ‑

MR GAGELER:   None of those things.  If your Honour has North Shore Gas 120 CLR 118 and if your Honour turns within the judgment of Justice Windeyer to page 133 at about point 9, what I am saying is, if it is an attempt to echo anything, it is an attempt to echo what Lord Justice Scrutton is quoted as having said there and to similar effect your Honours see a statement in the joint judgment at page 127 in a passage beginning at about point 2 with the words “Whatever is fixed to the freehold” and continuing to about point 4 of the page.

HAYNE J:   That is a statement about rights of property in respect of an identified subject matter and that I can understand.

MR GAGELER:   Yes, and that is as far as I want to take it.  There is a specifically created and preserved property right in something described in the statute as “rail infrastructure facilities” which is separated from any interest in the land.  That is as far as I want to go.

GUMMOW J:   You rely on Sir Victor Windeyer’s judgment at 133 commencing with Lord Justice Scrutton about 10 lines from the bottom of the page, I think.

MR GAGELER:   Yes, your Honour, yes.  Indeed, the entirety of Sir Victor Windeyer’s judgment is extremely instructive, particularly the page before as well, page 132, beginning with the last two lines on page 131.  But it is an error to attempt to characterise these rail infrastructure facilities by reference to some common law categorisation, in our respectful submission.  The only statutory question that arises, are they land or not land and the point I am seeking to make is that they are not land.  They are separated by virtue of the statute.  What they are is sufficiently answered by saying they are what the statute says they are, rail infrastructure facilities.

GUMMOW J:   Yes, but the question then becomes, does the revenue statute use this word “land” in its technical common law sense or is it loose enough to embrace these statutory interests?

KIRBY J:   That is the problem I have with the current way you are advancing your argument, that you have not even taken us to the revenue statute yet and essentially, as this Court has said so many times, our duty in this case is going to be ultimately to give effect to the will of Parliament as expressed in the Duties Act.  So that is the anchor of everything.

MR GAGELER:   I accept that, your Honour.

GUMMOW J:   What were they construing in the Gas Company Case?  Not a revenue statute, was it?

MR GAGELER:   Yes, they were construing the provisions of the Public Works Act.

GUMMOW J:   Yes, it was the resumption statute.

MR GAGELER:   The resumption statute where the question arose as to whether the company that had, pursuant to statute, laid pipes under the earth thereby had an interest in land that was compensable upon resumption.  The case was relevantly argued in two ways.  One way it was said that the pipes themselves became land.  That is very similar to the argument that I am now dealing with and that was accepted by Justice Hodgson in the passage I have just come to, that the pipes themselves became land.  That was rejected by all members of the court.  The other way in which it was argued was that the space occupied by the pipes, the three‑dimensional space, was land and the statutory right to lay the pipes carried with it some statutorily created interest in the land that was itself an interest in land.  That was also rejected by all members of the court.

That second argument, most clearly and for present purposes, usefully rejected by Justice Windeyer at page 132, where his Honour accepted that the pipes occupied land, that is, that the space below the surface of the earth was land and that space was occupied by the pipes.  But he said at about point 3 after the reference to the Sydney Municipal Council Case:

But to say that a space below the surface of the earth may be a freehold is not to say that every space below the surface of the earth is the freehold of the person who has the use of it.  And to say that the space which a gas main or pipe occupies is “land” is not to say that the gas company has an estate in that land.

KIRBY J:   That is a very different question than the one we have here.  I mean the issue is not whether your client had an estate in land.  It is a question of whether in accordance with the Duties Act it acquired a right to use land.  That is a very different issue than the issue that was considered in the case that you have just taken to, the North Shore Gas Company Case.

MR GAGELER:   Yes.  The question is whether my client by the access agreement acquired a right to use land.  That is the ultimate question and it is the question to which I will come.

CRENNAN J:   Does that imply you accept there is a right to use land, but the question for us is the source of that right?

MR GAGELER:   Yes, I accept that there is a right to use land that comes from clause 5.

GUMMOW J:   It comes from the entry right, does it not?

MR GAGELER:   It comes from a separate right which I have not yet got to, which is clause 5, but before I am getting there, I am dealing with some of the more perhaps peripheral arguments that found some traction in the Court of Appeal.  One of those arguments was that the infrastructure facilities themselves, or at least some of them, were themselves land.  That is the argument that I have sought to address in part by reference to the way in which an almost identical argument was rejected in the North Shore Gas Company Case.  So, your Honours, moving on really from that part of the argument to the more critical aspects.

If your Honours then go within Schedule 6A to clause 5, you will see what we accept certainly does give us a right to use land.  Clause 5 at page 121 provides in subclause (1):

A person who is a party to an access agreement is authorised to have access to the rail infrastructure facilities to which the access agreement relates, even if the facilities are situated in or on SRA land, if access is exercised in accordance with and as permitted by the access agreement.

And subclause (3) says that the “access agreement” in that context:

means an agreement, entered into by the RAC pursuant to the NSW Rail Access Regime, that permits a person to operate rolling stock on the NSW rail network.

KIRBY J:   Does your concession run to conceding that it is the agreement by which you acquire the right to use land?

MR GAGELER:   No, it does not because that would be to concede the issue in the case.  No, what I accept, fully accept, indeed it is my point, is that it is the statutory conferral of authority by clause 5(1) that gives my client the right to enter and to use any land upon which the rail infrastructure facilities may be situated.

KIRBY J:   Yes, but the Act and the clause on their own would be irrelevant unless you had the agreement.  It is the agreement that gives the bridge of view to the Act.

MR GAGELER:   Absolutely, your Honour.  That then will turn on the meaning of the words “by which” in section 164A(b).

KIRBY J:   If the Act stood out there and you stood out there, no problem.  It is the fact that the agreement is what links you to the Act.

MR GAGELER:   Yes, and I accept that, your Honour.  If one gets to that point, then the entirety of the case turns on the words “by which”.

KIRBY J:   As Justice Ipp recognised.

MR GAGELER:   As Justice Ipp recognised, however, his Honour agreed with Justice Hodgson who had many other ideas, and Justice Basten also had different ideas.  I am seeking to clear those ideas away, your Honour.

KIRBY J:   You seem more comfortable attacking all these other ideas.

MR GAGELER:   Not at all.  No, I am quite happy to attack “by which” but I wanted to build up to a crescendo, your Honour, by the time I get there.  What one has in clause 5(1) is a statutory conferral of authority to enter and use land.  It is a pre‑condition of that statutory conferral of authority that a person had entered into an access agreement and it is a condition of the exercise of that statutory authority that the person act only in accordance with and as permitted by an access agreement, but the fundamental point is that the right or authority to enter and use land is a statutory right or authority that it is a right or authority that derives from the statute.

Now, Justices Hodgson and Basten, again to clear away some other ways in which the case was analysed, Justice Hodgson at page 289 in paragraph 30 and Justice Basten at paragraphs 78 to 82 of his judgment beginning at page 304, appear, and I confess it is not entirely clear, but they appear to have taken the view that the access agreement itself conferred by agreement a right to use not only the rail infrastructure facilities, but the land constituted by the space they occupied and the space around them.  In our respectful submission, that characterisation is simply wrong and falsified by the distinction drawn by the statute itself. 

It is the ownership of the rail infrastructure facilities that alone is vested in RAC.  The right to use those rail infrastructure facilities is then conferred by RAC on a rail operator by agreement.  It has no power.  Certainly no part of its statutory functions is to confer on a rail operator by agreement a right which it does not itself have.  Its ability to confer anything by agreement is limited to what it has, and that is the rail infrastructure facilities alone.

The right to use the land whether it be the space they might occupy from time to time ‑ and your Honours have seen they can be moved.  Even though they might be big in some cases, they can be moved – whether it be that space or the space around them, above them or below them is conferred by statute on the RAC itself by clause 3 of Schedule 6A and on a rail operator by clause 5 of Schedule 6A. 

If your Honours then very quickly go to the Rail Access Agreement itself.  It is at page 46 and following of the appeal book.  There are really just two basic things to note about it.  The first is that its very existence, as well as its structure, reflect the requirements of the Act; particularly section 19E(2) and subsection (5) and of the New South Wales Rail Access Regime, particularly clause 5.1 and 5.2. 

The second thing is that by the Rail Access Agreement, Rail Access Corporation does not purport to grant access to or require the payment of an access charge for anything other than use of the rail infrastructure facilities that are alone vested in Rail Access Corporation.  If I can very quickly refer your Honours to the relevant parts of the document without labouring them. 

Within Schedule A at page 101 there is a dictionary of terms that are used in the agreement.  In familiar terms your Honours will see definitions of “Access”, and “Access Rights”, and your Honours will note the definition of “Access Charges”.  Again in familiar terms, your Honours a couple of pages over will see a definition of “NSW Rail Network”.  That appears at page 107 and at page 109 “Rail Infrastructure Facilities”, again reflecting the statutory definition but making clear that what we are concerned with is in things vested in Rail Access Corporation.

Then going to the operative provisions.  At page 51, your Honours will see clause 2.1, which although said to be an operative provision is really a statement of the position that:

Rail Access is responsible for Access to the NSW Rail Network –

and:

National Rail is a Rail Operator.

Then 2.4(a) and (b) say:

Rail Access grants to National Rail the Access ‑ ‑ ‑

KIRBY J:   That is neutral, is it not, because the rail access is afforded following an agreement.  I use a neutral phrase.

MR GAGELER:   Yes.

KIRBY J:   So it does not really help in the problem we have got.

MR GAGELER:   Well, it does.  It squarely addresses the problem we have got, your Honour.

KIRBY J:   How?

MR GAGELER:   My point about “by which”, which I will develop very shortly straight after lunch is this.  “By which” looks to the source of the right in question.  That is the position that Justice Gzell was persuaded to, it was rejected by all members of the Court of Appeal.  If I am right that “by which” requires the agreement itself to be the source of the right to use land, that is, the right to use land derives by contractual force from the agreement, if that is the position, then what I am seeking to show is consistently with the statutory scheme that this agreement does not give any right to use anything other than the infrastructure which is separated from the land and by it, what was then National Rail Corporation, the appellant in these proceedings, attain nothing more than a right to use the rail infrastructure facilities and paid for nothing more than the right to use the rail infrastructure facilities.

GUMMOW J:   Yours is a very disembodied notion of what the infrastructure facilities are.  Infrastructure facilities are actually getting onto the rails and getting the products moved about on them and that involves use of land.

MR GAGELER:   Mine is an entirely functional understanding of what these facilities are, consistent with their labelling and consistent with the way in which they are provided for within ‑ ‑ ‑

GUMMOW J:   But you said “by which” equals the source, I think you said.

MR GAGELER:   Source, yes.

CRENNAN J:   Sole source.

MR GAGELER:   It is not a question of cause and effect.  It is not a question of causation.

KIEFEL J:   So do you deny that the contrary, which has the effect of or one effect, flows from it, which is I think what is put against you?

MR GAGELER:   Yes, I mean, the words “by which”, of course, can mean many things in many different contexts.

GUMMOW J:   Without which it would not be, would it, if it were not for the agreement?

MR GAGELER:   No, that is right.  I accept that there is a causal connection.

CRENNAN J:   Well, it must derive from the agreement.

MR GAGELER:   Yes, I say it must derive from the agreement, that is, the right is something that – it is hard to think of any other words – the right is something that is given by a contractual force.  I think that is the best way.

CRENNAN J:   One is direct and one is indirect.

MR GAGELER:    Yes, although I hesitate to move into language of causation, but if your Honour limits direct to a non‑causative – but I am looking at the effect of the agreement, that is, what the agreement does as an agreement by force of being an agreement as distinct from what the agreement might give rise to when something else seizes on the agreement.  That is the distinction.

CRENNAN J:   What about a necessary implication that you could not have access to the infrastructure without access to the land?  You know, right of entry onto the land?

MR GAGELER:   I understand what your Honour is saying.  This is a contractual implication your Honour is suggesting.

CRENNAN J:   Yes, that is what I was referring to.

MR GAGELER:   You would only make such an implication if it were necessary, applying ordinary principles and it is not necessary in the present case ‑ ‑ ‑

CRENNAN J:   Yes, Codelfa and so on.  Because of the statute.

MR GAGELER:   Because of the existence of the statutory right.  That is the answer to your Honour’s question.

If I can spend one minute just completing the facts and then I will come very quickly to the “by which” point straight after lunch.  Your Honours will see clause 2.4(a) and 2.4(b) which define the nature of the rights of access.  You see 2.4(b)(ii); they are said to be:

for the rights set out in the Train Specification –

That is something that is defined at page 110.  I will not go through it, but being realistic and no disembodied here ‑ going back to something your Honour Justice Kirby was asking me about ‑ what this agreement allows my client to do, and nothing more, is to run trains along train tracks at specified times.  That is the whole purpose of this agreement and for that ‑ ‑ ‑

KIRBY J:   Train tracks are not in a computer.  The train tracks are in reality.  They are on land.

MR GAGELER:   The train tracks sit on ground owned by someone else, yes.

GUMMOW J:   These statutory rights that are created would otherwise be invaded, would they not?

MR GAGELER:   Exactly, yes, but we do not pay for the exercise of these statutory rights and if I could just point this out.  Clause ‑ ‑ ‑

GUMMOW J:   Does the Act itself, the Transport Administration Act, give any remedies for invasion of these rights that are created under the statute?

MR GAGELER:   I am sorry, my client’s statutory right to use?

GUMMOW J:   There are statutory rights created, a third party invades them, does the statutory scheme say that that can be treated as wrongful in some particular way or does the common law just ‑ ‑ ‑

MR GAGELER:   No, the common law would step in at that stage, your Honour, to protect the statutory right, if necessary.

GUMMOW J:   You would seek an injunction in aid of your statutory right, I suppose?

MR GAGELER:   Yes, and it would be an interesting question as to whether I could get damages.

CRENNAN J:   It is a trespass for someone to go onto the land to catch one of your trains?

MR GAGELER:   It would be very silly, but if it is a trespass, your Honour, the right that would be being trespassed would be the statutory right conferred by clause 5.1 of Schedule 6.

HAYNE J:   The answers you have just been giving, Mr Gageler, might, I think, have to deal directly with clauses 8 and 9 of Schedule 6A.  I do not suggest you deal with them immediately, but at some point I think you may have to ‑ ‑ ‑

GUMMOW J:   Seems to be a damages remedy there.

MR GAGELER:   I am sorry I have overlooked those. 

GUMMOW J:   We will adjourn until 2.15.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

GUMMOW J:   Yes, Mr Gageler.

MR GAGELER:   Can I tidy up two or three things that I left hanging before lunch before moving on to the Duties Act?  Your Honour Justice Gummow asked what remedies would exist for interference with the exercise or enjoyment of the statutory rights created by Schedule 6A of the Transport Administration Act.  Clauses 8, 9 and 15(c) of that schedule are directed in different ways to the protection and preservation of rail infrastructure facilities and clause 9 – your Honour Justice Hayne referred to this – specifically confers on RAC a right to obtain compensation for loss or damage resulting from interference with any of its rail infrastructure facilities.  But so far as interference with the enjoyment or exercise of the right of access conferred on RAC by clause 3.1 or on a rail operator by clause 5.1is concerned, the statute is silent. 

That would leave the ability, in our submission, to obtain an injunction and possibly the ability to found an action at common law for damages.  When I mentioned that in answer to your Honour Justice Gummow this morning I had in mind the discussion of Sir Frederick Jordan in a case – it is not on our list.  The case is Independent Oil Industries Limited v The Shell Company of Australia 37 SR (NSW) 394 and the particular discussion is at page 414. I mention it only as a possibility, your Honours.

GUMMOW J:   We looked at that case in the Olympic case we had.

MR GAGELER:   I was not aware of that, your Honour.  Your Honour Justice Crennan asked me a question which I frankly misunderstood.  Your Honour was asking me, I now understand, as to the position of a person who might come onto SRA land so as to catch one of our trains.  In fact, that would not happen because in fact we do now and have always operated only a freight service.  In the scheme of the legislation, and as reflected in the terms of the access agreement, in particular at page 109 of the appeal book in the definition of “rail infrastructure facilities”, your Honours will see that what is specifically not included within “rail infrastructure facilities” is stations, platforms and freight centres or depots. 

What we have if you put together positively the right granted by clause 2.4(b) as explained in clause 3.1 read with the definition of “train part” and the definition of “train specification”, you put all those together and what we have is simply the right to run trains along particular segments of track in particular intervals of time.  So far as the loading and unloading of trains is concerned, that is something that we have to do at our own sidings.  We have to make our own arrangements which are quite separate from anything we have by virtue of this agreement.

To tidy up one thing that I think I almost said before lunch; what we pay for under clause 2.6(a) of the agreement is an access charge determined in accordance with Schedule C.  Schedule C, which is at pages 119 to 120 in its original form, provided for an arbitration by the Independent Pricing and Regulatory Tribunal of New South Wales and the resulting structure of prices is explained in the affidavit at pages 12 and 13 of the appeal book.

What that comes down to essentially this; for each train that runs along a train path in accordance with a train specification, there is a flat fee called a “flag fall” and a variable fee calculated on the basis of gross tonnes per kilometre.  That then makes sense of the agreed fact that one sees at page 26 of the appeal book in paragraph 1 and then paragraph 2, “The Relevant Amount”.  That was the amount that was used to determine the duty that was paid by Pacific National as access charges as set out in Schedule C of the access agreement and the relevant amount was calculated by RIC and charged to Pacific National on the basis of a flat fee and variable fee in respect of each of the plaintiff’s trains having access to the New South Wales rail network.

The long and the short of it, your Honours, what I seek to get out of all of that is the only thing done by the agreement was to confer on us a right to use the infrastructure which was separated from the land.  That is what we obtained contractually under the agreement and that is what we paid for under the agreement.  Such right as existed to use any land was a right conferred by statute specifically by clause 5(1) of Schedule 6A.  We accept, conditional upon the agreement coming into existence, we accept there was a cause and effect relationship.

So, your Honours, if I can then come to the Duties Act which I hope your Honours have in reprint No 5. The relevant part is Chapter 5 at the beginning of page 122. It is to be read with the definition of “land”. That appears at page 236 within the dictionary. I hope your Honours have that. It is also to be read for completeness with the definition that appears in the Interpretation Act 1987. His Honour Justice Basten at page 303 of the appeal book paragraph 77 notes that definition, but goes on to note, absolutely correctly, that the “language does not take the matter any further”. Both the definition in the dictionary to the Act and the definition in section 21 of the Interpretation Act are inclusive definitions.

His Honour Justice Basten usefully at page 301 over to the top of the next page cites two textbooks for the proposition and I pick it up in the last two lines of page 301 that:

In its common law meaning, “land” is an area [sic] of three‑dimensional space, its position identified by natural or imaginary points located by reference to the earth’s surface.

There is then a similar statement in the Gray textbook that his Honour then sets out just below that.  We accept that as the appropriate definition of “land” and the appropriate definition for present purposes.  It is explicitly also the definition that was adopted in the North Shore Gas Case, implicitly, I say, by the joint judgment and quite explicitly by Justice Windeyer in one of the passages I have already taken your Honours to.  So that is what we are talking about with land. 

Going back then to Chapter 5 beginning at page 122, may I simply survey the provisions and then come to the “by which” question, which is the only question, in our submission.  Section 164 says:

This Chapter charges duty on a lease instrument, being an instrument that evidences or effects a lease (as defined in section 164A).

Section 164A defines “lease” to mean:

(a)a lease of land in New South Wales or an agreement for a lease of land in New South Wales, or

(b)an agreement (such as a licence) by which a right to use land in New South Wales at any time for any purpose is conferred on or acquired by a person –

who then becomes the lessee.  Then paragraph (c) ‑ ‑ ‑

KIRBY J:   What is the origin of that wider expression?  Did that come in?

MR GAGELER:   The actual origin, your Honour?

KIRBY J:   Yes.

MR GAGELER:   It is historical derivation is through section 76 of the 1920 Stamp Duties Act, and I will take your Honour to one case that dealt with that provision in due course.  To be precise, a 1930 amendment to the 1920 Act.  Then paragraph (c) refers to “a franchise agreement” and as your Honours will see a franchise agreement is, as the note indicates, “defined in the Dictionary” at page 234.  It can really be set to one side.

It is dealt with quite differently within the scheme of Chapter 5 from the way in which the paragraph (a) and paragraph (b) leases are dealt with.  Then section 165 says:

Duty is chargeable on a lease instrument:

(a)at the rate prescribed under this Chapter, on the cost of the lease, as determined in accordance with this Chapter.

The rate prescribed by this Chapter is the ad valorem rate prescribed in section 170(1).  The cost of the lease is worked out in accordance with section 166.  Subsection (3) deals with the cost of a franchise agreement and can be put to one side.  It is subsection (1) that deals with:

The cost of a lease (other than a franchise arrangement) –

and therefore covers both paragraphs (a) and (b) of the definition of “lease”.  Within section 166 it is really the first paragraph, the first component of the aggregate that is of any significance for present purposes.  The cost of the lease there includes the rent, which is defined in subsection (2):

payable during the term of the lease or in advance of the lease –

and then significantly:

any amount paid or payable for the right to use land under the lease.

I will come back to that in a moment.  Section 168 then says that it is the lessee who is “liable to pay the duty” and section 169(1) says that the:

lease agreement becomes liable to duty on the date of first execution.

But it is subsection (2) which if otherwise applicable would make these provisions applicable for the period in question here, and it says:

A lease instrument also becomes liable to duty on the making of a variation to the lease that increases the cost of the lease.  Duty is then chargeable on the amount of additional cost resulting from the variation.

So it is through section 169(2) that duty was sought to be levied in the present case.

Your Honours, if one accepts that the only relevant effect of the access agreement in relation to “land” was to trigger and then condition the statutory right which was conferred by clause 5(1) of Schedule 6A to the Transport Administration Act, the question and the only question becomes whether that causative effect was sufficient to make the access agreement an agreement by which a right to use land was conferred on or acquired by the appellant, and that is the question to which I now turn.  Your Honours have seen that Justice Ipp explicitly – it is really the whole purport, his judgment – adopted an analysis that would say that a causative effect of that nature was sufficient.

Justice Basten, as we read his Honour’s judgment in paragraph 82, page 306, also adopted that approach as an alternative basis for his decision and perhaps also Justice Hodgson.  What it does is to import into section 164A(b) a notion of causation, undoubtedly appropriate if one is concerned with an allocation of responsibility.  In our submission, however, it is in this particular context misplaced.  Justice Gzell, in our respectful submission, was absolutely correct where he said at page 267 of the appeal book, paragraph 17, that the expression “by which” in this context is looking to the agreement as the legal source of the right to use land.  In our submission, that construction is ordered, one, by the context and, two, by the history.

The context has two elements, your Honours.  The first element is simply this.  If you look to the nature of the instruments which by a combination of section 164 and 164A(a) and (b) are brought within the compass of the concept of lease instruments.  They are all instruments which, of their nature, in our submission, evidence or record something that is itself the source of a legal right.  You look at lease of land, obviously that is so.  An agreement for lease obviously again it is so and it is so also in the example that is given in paragraph (b), that is a license.  The license is itself the source of legal right.

GUMMOW J:   What is the right here?  The right here is a statutory right, is it not?

MR GAGELER:   The right here is the statutory right, yes.

GUMMOW J:   The statutory right pre‑exists?  Its pre‑existence is assumed?

MR GAGELER:   Yes.

GUMMOW J:   Then you ask, is this an agreement by which that pre‑existing right is conferred?  How do you get out of that?

MR GAGELER:   Well, I think that would really state my argument, your Honour.  The answer is no.  The right, as your Honour says, pre‑exists.

GUMMOW J:   That is right, but it is not conferred in relation to this party.

MR GAGELER:   Your Honour, the right is conferred by the statute.  The right derives from the statute.  If one is asked, what is being enforced, if I seek to enforce it by any available mechanism, what am I enforcing?  I am
enforcing a statutory right.  I am not enforcing a right that comes from the agreement.  Putting that in other language, I am not enforcing a contractual right.

KIRBY J:   Clearly, whether the right is conferred by the statute.  Until there is an agreement, the statute is speaking to the world.  It is the agreement that makes the statute speak to your client and therefore the suggestion is that it is pursuant to the agreement that the right which pre‑exists in the statute is drawn down and made to apply to your client.

CRENNAN J:   Or, as Justice Ipp would say, that is the way in which the right is acquired.  So he is looking at the legal effect.

MR GAGELER:   He is looking at the word “acquired”, yes.

HAYNE J:   But is your embrace of what Justice Gzell says in paragraph 27, the embrace of a premise that a right to use land inevitably has a singular legal source?

MR GAGELER:   I would not go so far and his Honour was not necessarily going so far, your Honour.

HAYNE J:   Absent that premise, how does your argument cope with an analysis which identifies a combination of sources for the right to use the land comprising the pre‑existing statute engaged by the particular agreement between parties?

MR GAGELER:   That would not be the way we characterise the present circumstances.  We accept that the trigger for the statutory right is the existence of the agreement.  It is, however, the statutory right and the statutory right alone which is exercised when we want to go onto SRA land to do what we have contracted to do in respect of the rail infrastructure.

HAYNE J:   But neither the Act nor the agreement has legal consequence considered separately from each other.

MR GAGELER:   No, I do not accept that.  If I start with the agreement, the only legal effect that derives contractually from the agreement is a right to use the rail infrastructure.  So far as the Act is concerned, it seizes upon the fact of such an agreement existing and where such an agreement exists, it confers a statutory right to use the land.

HAYNE J:   But the right to use the infrastructure, in particular by sending rolling stock down the rails, would constitute a trespass to the airspace of the landowner, would it not, absent the statute?

MR GAGELER:   Yes, absolutely.  The contract could not be meaningfully performed absent the statutory right.  Nevertheless, it is the statutory right that is the right.  It does not come from the agreement.

KIEFEL J:   Is not the distinction that the statute creates it and the agreement confers it?  Does that not follow from what Justice Gummow says?

MR GAGELER:   No, it does not, your Honour.

KIEFEL J:   The agreement does not create it, but that is part of the point.

MR GAGELER:   The agreement does not create it ‑ ‑ ‑

KIEFEL J:   But then the statute does not confer it.

MR GAGELER:   No, no.  I am sorry.  I do not want this to become circular.  I see where your Honour is going.

GUMMOW J:   Going off in the other direction as fast as possible.

MR GAGELER:   I am not going to be trapped.

HAYNE J:   There are a couple of buffers looming up, Mr Gageler.

MR GAGELER:   It does not work that way, your Honour.  There are different sources of rights.  Some come from the common law, some come from statute.  What one has here is the possibility of a right that comes via the common law from an agreement, a contractual right.  It is a right of that nature that is being referred to, in our submission, in section 164A(b).  That is a right of that nature.

What we have in the present case, however, is not a right of that nature.  It does not derive in that way.  It is a statutory right, a statutory right which exists, if you like, which is conditioned by the existence of a particular fact, the fact of an agreement.  But the source of the right which really only comes out when you follow his Honour Justice Gummow’s pre‑lunch question through and you want to enforce it, what is it you are enforcing, you are enforcing a statutory right.

CRENNAN J:   The trouble is without the instrument you do not have a right to use the land.

MR GAGELER:   Absolutely.  Your Honour, if we were in the area of causation I lose.  I mean I want to make that absolutely clear.  If it is cause and effect, I lose.  Obviously there is a causal connection, but in my respectful submission, we are not in that area.  That is one area of the context.

The other element of the context, your Honours, is this.  If you look at the method for determining the cost of a lease by reference to which duty is chargeable, if you get within paragraph (b), then the only relevant part of section 166(1) can be the concluding words of paragraph (a), that is, you are looking for an amount “paid or payable for the right to use land under the lease”.

Now, if you are talking about a “right to use land” that exists “under a lease” you are naturally directing attention to the lease as the source of the legal “right to use land”.  We have in our written submissions in paragraph 43 mentioned two cases that have ‑ ‑ ‑

GUMMOW J:   Just before you leave that, how does one read of 164A(a) plus 166(1)(a)?  It seems to be that you just are in a paragraph (a) situation so you have a lease that is ordinarily understood.  What you then are assessed on, through the cost idea, is “the right to use the land under the lease”.  In other words a phrase “the right to use the land” seems to be – and this may be in your favour – linked with the notion of what the lease is.

MR GAGELER:   Yes, it is in my favour, yes, very much.  It applies in both an (a) and a (b) situation.  What does it mean to have a right to use land under a lease?  It means that you have a right that derives from the lease.

GUMMOW J:   Well, you then have to say that (a) and (b) are both talking about rights to use land, conferred by the instrument, but (b) is a situation that you cannot manage to categorise as a lease as understood at common law.

MR GAGELER:   Exactly, that is what it is covering.  It is covering either a licence or something in the nature of a licence and either way the genus, if you like, of paragraphs (a) and (b) is a consensual underlying contractual arrangement and is from the operation of the common law on such a contract that one ‑ ‑ ‑

GUMMOW J:   How does this Act deal with profits a prendre, for example?

MR GAGELER:   It may be, your Honour that a profit a prendre would fall within paragraph (b).  Certainly a profit a prendre if coupled with a licence, as they usually are, would fall within paragraph (b).

HAYNE J:   There is 172(2) and example (a) casts some light on that.

MR GAGELER:   Yes, it does.  So, your Honours, those two cases that we have mentioned in paragraph 43 of our submissions, the Sara Lee Case and Chan, both deal with very similar language.  The Sara Lee Case dealt with the expression “under a contract” in a statutory setting.  It was held there that it directed attention to the source of the obligation as lying in the contract itself.  Chan was concerned with the language “under this lease” as appeared in a lease and what was there said – the page we have given a reference to – was that the expression “under this lease” refers to an obligation and then a collocation of words were used:

created by, in accordance with, pursuant to or under the authority of, the lease.

All different ways of looking at the actual derivation of the right in issue. Not cause and effect, but simply a legal source. Your Honours, so far as the history is concerned, the respondent’s written submissions in paragraphs 8 and 11 correctly point out that section 164A adopts the language that had been in section 76 of the Stamp Duties Act 1920, but it substitutes the plain English “by which” for the more arcane “whereby”. There is one decision of the New South Wales Court of Appeal interpreting the old section 76 which, as we read it, is explicable only on the basis that the old “whereby” was looking to the source of the legal right in question and not to some test of causal connection. That is the case of Mena House Limited v Commission of Stamp Duties 64 SR (NSW) 290. It is an authorised report. I think we gave in our written submissions an unauthorised report. It is a difficult case to read, but there is just one short passage that I wanted to go to.

What the case concerned was an original agreement for lease which was followed by a supplemental deed that amended the original agreement before the lease began in accordance with the original agreement. It was held that neither the original agreement nor the supplemental deed amounted to an instrument whereby a right to property was conferred on or acquired by the prospective lessee. The only passage I wanted to take your Honours to is at the bottom of page 293 in the judgment of Justice Else‑Mitchell with whom the other members of the Court of Appeal agreed. His Honour sets out section 76 at about point 2 of the page. His Honour then refers to the history which began in 1930. He says, in dealing with the disposition of this aspect of the case, at about point 8:

The agreement of 30th June, 1961, and the deed of 8th March, 1962, do not, of course, operate as a demise or grant of any term or estate in the subject land; neither of them contains words of present demise and whether considered separately or together, they merely provide for a future grant of a formal lease.  This conclusion entails, I think, the rejection of the learned Solicitor‑General’s argument that the deed of 8th March, 1962, is liable to duty as an instrument whereby a right is conferred or acquired to use the subject land for an additional period of ten years.

If their Honours had been adopting a test of causation, then the fact that the agreement provided for the future grant of a former lease which would then have conferred a right of use of the land would have been sufficient.  So insofar as one gets any assistance from the history, this case, in our submission, is entirely consistent with the old “whereby” which transmogrified into “by which” adopting the test which Justice Gzell adopted in the present case.  If the Court pleases, those are our submissions.

KIRBY J:   Could I just ask you, in the special leave hearing Justice Gummow asked whether there was any wisdom to be procured by the use of the word “by” in the Trade Practices Act.  Do you remember that question?

MR GAGELER:   Yes, I do.

KIRBY J:   It is referred to in the respondent’s written submissions, but is there anything you want to add about that?

MR GAGELER:   No.

KIRBY J:   Because an awful lot hangs on that preposition in Trade Practices Act cases and it may be that that is a distinguishable circumstance.

MR GAGELER:   Your Honour, the question is very important.  The context is everything, of course, and in the context of section 82 of the Trade Practices Act one is concerned with the allocation of legal responsibility for acts causing damage.  That is the context in which that occurs.  The present context is completely different.  It is the characterisation of an instrument ultimately that one is concerned with and one does that by reference to the rights created by that instrument, “by” in that context is completely different from “by” in the context of looking at how damage might be caused.

KIRBY J:   Can I ask you if Parliament had turned its attention to an express provision to secure the objective which has now been upheld by the Court of Appeal, what do you say the statute would have said instead of what it does say?  Where would you have added an adverb whereby directly or indirectly or how would Parliament have expressed it, in your submission, to remove the ambiguity you want us to find in the statute?

MR GAGELER:   Section 164A(b) would have referred not simply to an agreement by which the right to use land is conferred on the person, but it would have also referred to a statute by which a right to use land is conferred on a person.  That is the way I would do it, your Honour.  I would do it with major surgery.  Maybe my learned friend would ‑ ‑ ‑

HAYNE J:   You are not going to be imposing duty on the statute, are you?

MR GAGELER:   Well, you would have to restructure it a bit, but one way or another you would have to get to the lessee.  I can probably do better with a little bit of time, your Honour, on that.

KIRBY J:   That is fair enough, but it really comes back to Justice Kiefel’s point and Justice Crennan, I think, made the same point that the statute and the agreement alone do not do not do enough.  You need both.  It is the horse and carriage.  You need both.

MR GAGELER:   Causally, you need both, but if you are looking at the source of the right, it comes from the statute.

HAYNE J:   I know you have completed your submissions, but is the language of causation at all apt in connection with rights?

MR GAGELER:   No.

HAYNE J:   You are putting up as the antithesis of the construction you advance that there is some causative relationship between document and right.  Is not injecting notions of causation simply foreign to the realm of discourse with which we are concerned?

MR GAGELER:   Yes.

HAYNE J:   So the identification of the connection conveyed by the words “by which” you say is legal source?

MR GAGELER:   Yes.

HAYNE J:   And that legal source must be singular and found in the document which it is sought to bring to duty, is that right?

MR GAGELER:   Well, your Honour, I leave out the word “singular”.  The legal source must be found in the document, that is all I need.

KIEFEL J:   Could I ask you to turn your mind to the question about it being singular, though, in this sense, that the statute, if one puts aside notions of causation, the statute and the agreement operate together to confer the right to use.

MR GAGELER:   Yes.

KIEFEL J:   So is that sufficient or do you say it is insufficient for it to be an agreement under the Duties Act?

MR GAGELER:   I accept the premise, that is, that they operate together, but I reject the conclusion because I say that the statute necessarily is looking to the source of the right, and although the two operate together for the right to be enjoyed and exercised, if you look to the source of the right, it is the statute, your Honour.  The statute operating by reference to the fact of the agreement.

KIEFEL J:   You mean will refine further the original source, the absolute source?

MR GAGELER:   Well, look, if I go to court ‑ ‑ ‑

KIEFEL J:   Well, I think we were talking about creation and conferral, so I will take it as a genesis argument that ‑ ‑ ‑

MR GAGELER:   Well, your Honour, if I go to court and I want to make sure I get onto the land and somebody says, well, what are you enforcing here?  I say I am enforcing my right that exists by virtue of the statute.  I am enforcing the statutory right under clause 5(1).  How do I show I have that statutory right?  Here is my agreement.  Here is the agreement, here is my right, and I am enforcing the right.

KIEFEL J:   Do you know if you were pleading it you would say the statute provides (a) paragraph 2, I have certain rights under the agreement to which the statute refers.

MR GAGELER:   Yes, that is okay.  But then the relief that I am seeking is an injunction, possibly damages for the injunction, in aid of my statutory right.  If the Court pleases.

GUMMOW J:   Yes, Mr Slater.

MR SLATER:   Your Honours, may I begin by pointing out or by reiterating perhaps what Justice Kirby has pointed out that this is a case about the construction of the Duties Act and not a case about the construction of the Transport Administration Act.  So that it is really about interpreting Chapter 5, not about interpreting clause 5.

KIRBY J:   That only goes so far though because then you have to pick up the Railways Act legislation because that is going to help us understand what the agreement is that you are seeking to bring to duty.

MR SLATER:   Indeed, your Honour, and that is what makes revenue law so much fun.  You get cases like Norman’s Case.

KIRBY J:   That is one way to describe it.

GUMMOW J:   You have to work out the relation, it seems to me, between (a) and (b) of the definition of “lease” and looking at paragraph (a) it is the demise in a lease which grants the right to use land.

MR SLATER:   The first two words, yes, your Honour.  The second phrase in paragraph (a) is not a demise, it is an agreement for a demise.

GUMMOW J:   Exactly, yes.  Nevertheless it is a Walsh v Lonsdale agreement I suppose.  So in equity that is how it would be regarded.  It is an agreement to grant a demise.

MR SLATER:   That is one of the things which vexed Justice Else‑Mitchell in the Mena House Case.

GUMMOW J:   Yes, that is right.

MR SLATER:   May I come back to that later in my submissions, your Honour?

GUMMOW J:   Well, I think it is at the beginning actually, but you come back to it if you want to.  If we do not work out the relationship between (a) and (b) we cannot understand what 166(1)(a) is talking about because it assumes that there is a right to use the land under the lease within (a).

MR SLATER:   No, it does not, your Honour.  May I make that point too?

GUMMOW J:   Yes.

MR SLATER:   I said this is a case about construing the Duties Act.  Section 166 talks about the cost of a lease and in paragraph (a) it talks about the rent due in the term of the lease.  There is a tendency on the part of draftsmen, especially draftsmen of fiscal legislation, to define terms to mean something they do not mean in ordinary legal discourse and that has happened here.  Rent, strictly speaking, is that which is reserved under a lease.  There is a decision of the House of Lords and a decision of the Court of Appeal on which I think your Honour Justice Kirby sat about the evolution of the notion of rent beyond merely that which is reserved.  But in any event, paragraph (a) is talking about rent as if it were dealing with a demise.

But the Act defines “lease” to mean an agreement for lease and to mean an agreement for use.  So that when both section 166 and section 164 talk about a lease, they are talking about the broader concept that is imposed by the inclusive and extensive definition in section 164A.  So I think the point that your Honour was putting to me is about lease being a demise.  I may have misunderstood the point your Honour is making to me.  If it is about lease being a demise, then ‑ ‑ ‑

GUMMOW J:   It is not a right that is anterior.

MR SLATER:   Paragraph (b) is not a right anterior to ‑ ‑ ‑

GUMMOW J:   Paragraph (a) is not something that is anterior.  The right to use the land referred to in 166(1)(a) is that which is inherent one way or another in (a) in the nature of the agreement or the lease, grows out of it.  Mr Gageler’s point is that his right grows out of something else.

MR SLATER:   Yes, out of paragraph (b).  Paragraph (a) is apt to comprehend “any amount paid or payable for the right to use land”, not just under a lease comprising a demise, but under a lease extending to a right to use land arising from an agreement, not an instrument.

GUMMOW J:   I understand that.  It is an agreement to do what?  Equity regards as done that which ought to be done, right?  So what is the point you are trying to make?  It might not comply with the requirements of 23D of the Conveyancing Act, might it not?  It might not be sufficiently in writing, et cetera, for the term, so on and so forth.  Nevertheless, if it an agreement, hopefully it is specifically enforceable and it is going to be caught.

MR SLATER:   An agreement under the second limb of paragraph (a) in section 164A would have the characteristics your Honour identifies, but an agreement under paragraph (b) may not.

GUMMOW J:   That is the question that is worrying me.

MR SLATER:   Such an agreement is still taken to be ‑ ‑ ‑

GUMMOW J:   Why is (b) put there?

MR SLATER:   It is put there to extend the scope of the charge to duty beyond demises and agreements for demises ‑ ‑ ‑

GUMMOW J:   Beyond something which is a lease or an agreement for lease.

MR SLATER:   Indeed.  Section 166(1)(a) is intended to bring within the scope of the charge the consideration not only for a demise or an agreement for demise, but also an agreement conferring non‑exclusive rights to use.  So it has to comprehend both.

KIEFEL J:   How does the franchise arrangement referred to in paragraph 6 fit into your conception of a broader purpose?

MR SLATER:   May I answer that by saying two things?  First of all, the franchise agreement provisions have their origin in a different part of the 1920 Act.  They were incorporated with this, so far as one can gather from the drafting, as a matter of perceived legislative convenience to bring together like charges in the same way.  They are actually a quite different concept.  Franchise is the grant of rights to use a trading name and a system and so forth.

KIEFEL J:   But (c) defines it further to be only a franchise arrangement with respect to a place or area.

MR SLATER:   Yes, that is a territorial limitation.  It is the right to trade as ‑ ‑ ‑

KIEFEL J:   It is not meant to have any real property in the limitations.

MR SLATER:   It is just a territorial nexus so that we do not endeavour to charge Western Australian transactions.

KIEFEL J:   Thank you.  I see.

GUMMOW J:   That then helps you, does it not, in giving content to (a) in 166(1)?  It is this notion of rent has to accommodate franchise fees. 

MR SLATER:   Yes.  It has to accommodate all considerations for the rights which are identified in each of paragraphs (a), (b) and (c).

KIEFEL J:   Except that the cost of the franchise arrangements referred to under 166(3).

GUMMOW J:   Yes. 

MR SLATER:   I am sorry, your Honour.  I am not sure that I understand the point that your Honour is putting to me there.

KIEFEL J:   Section 166(1) does not include the basis for duty rendered upon a franchise arrangement.  That is dealt with separately under 166(3), is it not?

MR SLATER:   Yes.

KIEFEL J:   Which tends to reinforce what you were saying, that it is franchise arrangements quite separate and apart from the other two provisions.

MR SLATER:   I think that is the correct position, your Honour.

GUMMOW J:   That sounds right.

MR SLATER:   Which I think does not help me the way your Honour the presiding Judge thought.

GUMMOW J:   No, it does not help you.

MR SLATER:   One takes the olive branch whenever it is offered, your Honour.  The other thing I wanted to draw your Honours’ attention to about these provisions is that in 2006, after the period to which this case relates, a new subsection (2) of section 164 was enacted which provides that the duty imposed by this chapter is abolished on and from 1 January 2008.  This chapter does not apply in respect of a lease first executed on or after 1 January 2008.

KIRBY J:   That was raised in the special leave to resist the grant of special leave but that having failed to do its work then, what is the relevance of it now?

MR SLATER:   Only to inform your Honours of the position.  I take it no further than that.  It just that it is not elsewhere referred to in the materials.

KIRBY J:   What was the name of that amending act?

MR SLATER:   That I do not have immediately to hand, your Honour.

KIRBY J:   Perhaps we can be informed of that.

MR SLATER:   My junior will tell me in a moment.  My friend tells me that it is in paragraph 28 of his written submissions in‑chief.  Your Honours, we filed written submissions and most of what we would wish to press upon the Court now is in those submissions, to the extent it matters, are dealt with only by my friend Mr Gageler in his written submissions and not orally.  I do not propose to deal with them again, unless the Court invites me to do so.

GUMMOW J:   Can you give us some examples of, putting aside these statutory creatures, what common law creatures would fall within (b), but not (a).  We mentioned a profit à prendre.

HAYNE J:   A contractual licence to use a car park in a building without assignment of a specific space.

MR SLATER:   Yes, your Honour.

CRENNAN J:   Agreement is not subject to duty as conveyances.

MR SLATER:   That issue does not arise under this Act, your Honour.  Chapter 2 only imposed duty on transfers of specific property.  “Conveyance” is a term no longer used in this legislation.

CRENNAN J: No, I was just referring to the origins of the language here which had been dealt with. I think that certainly part of the original intention in relation to section 76 as recast by the 1931 amendment.

MR SLATER:   The general confusion engendered by the decision in Commissioner of Stamp Duties v Henry (1963-64) 14 CLR 322. Those would be examples. A possible example, and I am fishing a little on my feet, would be the sort of right that was under consideration in the recent Arnhem Land Aboriginal Land Trust Case, the right to enter and fish, and I am sure if I had a moment I could think of others.

GUMMOW J:   The 1920 Act contained that mysterious section 71, remember, considered in Yeend’s Case in 43 CLR, that rights not previously in existence.

MR SLATER:   Yes.

GUMMOW J:   That has gone, has it?

MR SLATER:   Section 71 has gone, yes.  For such a right to fall within this it would have to be a right, for example, to conduct a copy shop or copy barrow in the foyer of a building and the payment for doing so would be within the scope of this.  I had not raised that sort of question because I am not sure that that takes it beyond the words “such as a licence”.

GUMMOW J:   Thank you.

MR SLATER:   As we would put the issues in the appeal to the Court, there are two essential questions.  If the Court is with us on either of them, then we would submit that the appeal must fail.  If I can endeavour to articulate the questions, the first is whether included among the rail infrastructure facilities which were vested in the body which I will call Rail Infrastructure Corporation were facilities which themselves comprised and were not merely affixed to land for the purposes of the Duties Act.  If that is so, then the rail access agreement conferred on the appellant the right to use them and the access charges were the cost of using them.  There has been some debate about what the cost is.  There was no issue about quantum at the trial or in the court below.  It is an all or nothing case.  In that event, duty is payable. 

The second issue which independently of the first would lead to dismissal of the appeal if answered in our favour is this.  Whether in the context and for the purposes of Chapter 5 an agreement by which a right to use land is conferred on or acquired by a person prescribes as the nexus between the agreement and the right a requirement that the right be found in the agreement alone – this is the issue which the Court was debating with my friend towards the end of his submissions – or whether the words extend also to the case where the rights provided for elsewhere, whether by another instrument or by general law or by statute, are conferred on or acquired by the person by reason or as the effect of the agreement. 

I think my friend agrees if the mere execution of the agreement is enough for the purposes of section 164A, then he loses.  We would say that mere execution is enough but, in any event, we would say that in this case the rights conferred or provided for by clause 5.1 are latent rights.  They are not conferred unless and until conferred by the entry by the parties into an access agreement as defined in clause 5.

GUMMOW J:   Do you say that in your written submissions, Mr Slater, the point you are making now?

MR SLATER:   Possibly not in precisely those words, but that is the burden of our submission.

GUMMOW J:   So you read the word “right” as including a right having its derivation or whatever in statute but which – one does not want to say inchoate – but which does not mature of the common object of commerce until there is this agreement?

MR SLATER:   Yes, your Honours.

HAYNE J:   Because the right is defined by reference to a person who is a party to an access agreement.  The holder of the right is defined and, thus, if the holder of the right is defined, the right itself is fully understood as including a reference to being party to an access agreement.

MR SLATER:   Yes, and, in particular, clause 5.1 stipulates that the right of access must be in accordance with and pursuant to the access agreement.

KIRBY J:   But what is your answer to Mr Gageler’s argument that when you actually look at the agreement, it is an agreement not by which a right to use land is conferred, but by which a right to use statutory facilities are conferred, and that the correct characterisation, reading the two statutes together, reading the Duties Act with the Railways Act, requires that you – because Parliament has not spelt it out and because you need to spell unique to read into the railways legislation and the agreement of the right to use land, that one should read it as limited to a right to use the facilities and that these are statutory facilities and that that is the natural way to read the two statutes together.

MR SLATER:   Your Honour, we would cavil with the proposition that these are statutory facilities.  That is sophistry of language.  One cannot use statutory facilities.  One can use a signal box, one can use a computer, one can use a railway line ‑ ‑ ‑

KIRBY J:   Would you concede that it is a little bit artificial to talk about using the facilities that involve moving the products over the rails as the use of land?  I mean, I understand fully your argument that that is inherent, inescapable and in the logic of the statute and the agreement read together, but it is a little bit artificial.  They are not actually getting out there and doing anything to the land.  That is, as it were, incidental.  It has got to be read in.  So why is it not possible to read – as I say, well, you are seeking to impose a duty here and therefore it should be reasonably clear and that one way of reading it, after all Justice Gzell who knows a lot about this area read it as being a right to use the facilities created by the statute as distinct from right to use land.  Now, what is wrong with that?  If there is an ambiguity, why would we not read it that way, leaving it to Parliament to make its will to impose a tax clear?

MR SLATER:   With respect, I do not think it is what Justice Gzell said, but ‑ ‑ ‑

KIRBY J:   Well, what is wrong with it anyway, if it is something that occurs to me?

MR SLATER:   As I said, we cavil with the notion that these are statutory facilities.  One uses the things which are rail infrastructure and one uses that three‑dimensional portion of the earth’s surface which is a rail infrastructure facility.  Now, insofar as one uses a thing which is a railway infrastructure facility, such as an overhead track structure or a train control system or a communications system or power cables ‑ ‑ ‑

KIRBY J:   Where are you reading now?

MR SLATER:   I am reading from the definition of “rail infrastructure facilities” on page 46 of the booklet which was provided by the appellant to the Court which contains annexures A, B and C, two versions of the Transport Administration Act and a version of the Duties Act, but it is section 19A of the Transport Administration Act.  The question your Honour has asked me really goes to the first issue that I wanted to address, so if I may address it in that way and take your Honours to that definition.  It is to be found in very similar language, obviously derivative, in the dictionary to the rail access agreement on page 109 of the appeal book at line 20.  I will not take your Honours to that one in particular.  The later version is to be found at page 84 of the legislation booklet. 

When one looks at the definition of “rail infrastructure facilities”, one sees that there are two categories of items, to pick as neutral a term as I can, that I referred to in it.  One is things such as “signalling systems, train control systems” which are clearly choses in possession or chattels.  They may be affixed to the land so that as between landlord and tenant they pass to the landlord.  This statute expressly says that that presumption is negatived.  So they remain choses in possession of Rail Infrastructure Corporation.  But there are other items in the definition which equally or clearly are not choses in possession.  The ones that we have drawn particularly attention to are “cuttings”.  That is the shaping of the earth’s surface to enable the railway line and the rolling stock to pass through it. 

A tunnel equally is a three‑dimensional space within the surface of the land and the three‑dimensional areas above and below the surface which are usable which equally, in our submission, is clearly land.  A track support earthwork – my friend sought to escape this by talking about “big things made of dirt”.  He used that phrase a number of times.  The trouble with big things made of dirt is that it subsumes the question.  It uses the word “thing” which is something which is apt to refer to a chose in possession.  But an earthwork by which the level of the railway line is raised above the prevailing surface of the land is not a thing.  It is part of the land.  It is just that the land has been reshaped.

My friend also sought to embody this notion that the sub silentio, this notion that these are choses in possession by talking about them being moved, but one does not move a tunnel, not in any apt sense.  “Move”, of course, has many connotations in the dictionary, but when it speaks of moving a tunnel, what one means is to dig a new tunnel and use it instead of the old tunnel.  When one digs a new tunnel and uses it instead of the old tunnel, it may be the that the consequence of these provisions is that what is vested in Rail Infrastructure Corporation is the part of the land comprised within the new tunnel and that title to the part of the land comprising the old tunnel reverts to the State Rail Authority.  That may be so.         Nonetheless, for the time being, wherever the tunnel is, the land comprised in it belongs to RAC.  It does not belong to State Rail Authority. 

These are the sort of issues which the Court dealt with the in Arnhem Land Aboriginal Land Trust Case and pointing out that the answer to the question “what is land” depends on the context in which the question is asked.  The considerations in that case turned on two circumstances.  One was that section 70 of the Land Rights Act prohibited entry into and remaining on the land, particularly drawing attention to the word “on”, and the other is that the grant of the land, or the fee simple in that case, was, as the Court pointed out, delineated in terms of metes and bounds and that led the Court to conclude that “the land” meant “a solid portion of the surface delineated by metes and bounds” for the purpose of that legislation.

Here the Duties Act defines “land”, in the passage which my friend drew to the attention of the Court, in the dictionary to the Duties Act, to include strata, so that it is clearly talking about, at least in an inclusive sense, land as a tangible thing, a tangible subject.  These are very tricky words, your Honours.  So that when the Act speaks of land, it speaks of that which can physically be used.  In our submission, when there is vested in Rail Infrastructure Corporation that part of the three‑dimensional surface of the land which is comprised in a tunnel or in a cutting or an earthwork or in a road or level crossing, then what is vested in the Rail Infrastructure Corporation is land.  Other things, choses in possession, they are also vested in Rail Infrastructure Corporation as being rail infrastructure facilities, but they are not land.  It is not the case that everything in the definition must be of the same character. 

HAYNE J:   Is the purpose of inclusion of such things as cuttings, earthworks and tunnels the engagement of the protective provisions found in clause 8 and the like in the Schedule?

MR SLATER:   Not only that, your Honour, but also the access provisions in clause 5 and the rights to deal in clauses 2 and 3, all of those things.

HAYNE J:   The operator can run the train through the tunnel, but do not interfere with the tunnel.  Now, why does one ever get to the point of saying, well, is that land or is that not land?

MR SLATER:   One does not for the purpose of the Transport Administration Act, which is my point.  In starting with the proposition, this is a case about the Duties Act.  Your Honours have made the point in other contexts that questions – the point was made in the Arnhem Land Case that some questions which have arisen and been debated before the Court simply do not arise for the purpose of resolving the question.

GUMMOW J:   Can we just look at clause 5 for a minute of the Schedule?  It says, “A person who is a party to an access agreement is authorised”.  Is it a fair reading of the phrase “is authorised” to read that as “has the right”?

MR SLATER:   I would have said so, yes, your Honour.

GUMMOW J:   Then has a right and then you read against that paragraph (b) of the definition of “lease”. 

MR SLATER:   Yes, your Honour.

GUMMOW J:   The statute does not fully fructify in its operation until you have got a party to an access agreement.

MR SLATER:   Who exercises rights in accordance with and as permitted by the agreement.

GUMMOW J:   So why then does not paragraph (b) bite at the definition of lease?

MR SLATER:   We would say it does, your Honour.

GUMMOW J:   It is not a question of causation.  It is a question of when the necessary right is fully vested and accrues under Part 5 of the Schedule.  The answer seems to be, when you have an access agreement conferring this right, and that authority then implicates (b) of 164A.  That is how it seems at the moment anyway.

MR SLATER:   We would agree with that, your Honour.

GUMMOW J:   It is not a question of causation.  It is a question of what it is that has to be bound together.

MR SLATER:   That sort of causation in the loose sense referred to the ‑ ‑ ‑

GUMMOW J:   To put it another way, there never is an access agreement.  Clause 5 just does not operate.

MR SLATER:   Without the access agreement, yes, your Honour.  It is a latent right, but not a ‑ ‑ ‑

GUMMOW J:   You cannot say it is a statutory right.  For the accrual of the statutory right you need an access agreement.

MR SLATER:   Yes, my friend uses the words “conditioned upon”.  There is a latent right conditioned upon there being an access agreement.  Once there is an access agreement, that which is potentially in the provisions of clause 5 is a right vested in the party to the access agreement by the entry into the access agreement.  That is addressing rather the second argument.

GUMMOW J:   Yes, I understand.

MR SLATER:   I rather think, your Honours, that I have said enough about the first point except for one thing that I wanted to say and that is that my friend said that the argument in North Shore Gas Company Case was almost identical with the argument in the present case.  We disagree with that.  The argument on the North Shore Gas Company Case was about whether the compensation legislation which only conferred rights to compensation for the resumption of land applied to gas pipes.

If your Honours recall the way in which the claims in that case were formulated, they are identified at page 120 of the report in 120 CLR.  There was a claim for the cost of laying substitute pipes which was not in dispute.  There was a claim for the value of feeder mains which was in dispute.  The principal subject of the dispute was compensation for, in effect, the loss of business which was sought to be characterised as a loss occasioned by the resumption of land.  What the Court said was that the pipes were not an interest in land, not least because, as Justice Windeyer pointed out, the council could require the pipes to be moved at any time.  All that the gas company had was property in the pipes and the right to leave them where within the land the council required.  That is a very different situation from the present.  It is a quite different argument, in our submission.

Your Honours have been taken to clause 2.4 of the access agreement and we would say that that confers the relevant right.  Our friends took your Honours to the decision in Mena House and read from one portion of it.  We would say that the decision in Mena House is very far removed from the present and really offers no guidance to the Court at all. Can I remind your Honours of the facts. The case is reported in 64 SR (NSW) 290. At the foot of page 290 in an extract from the judgment of Justice Else‑Mitchell it is noted that the first agreement was made in June 1961 and it was an agreement between the parties that a lease would be granted at a future date, being the date at which either a transfer of title occurred or a building was completed.

The second and amending agreement, which was the subject of the proceedings, was made in March 1962 before the date upon which the lease was to commence.  So that at the time that the second agreement was made there was no present right to a lease.  The Commissioner, no doubt for policy reasons, chose to run the case solely on the liability to duty of the second instrument and not on the liability to duty of the first instrument. 

The circumstance that the time from which the term was to commence had not yet arrived was what led the Court to conclude that the second part of section 76 which dealt with a right to use was not engaged because at the time the second instrument was executed there was no right to use. The time for occupation of the land had not yet commenced, possession had not been taken, rent had not been paid. Your Honours will see that consequence beginning at about the middle of page 293 after a reference to the 1931 Act. His Honour says:

It is clear, however, that s. 76(1) in its present form deals with two classes of instruments, namely, (a) promises of or agreements for a lease of any property and (b) instruments whereby a right to use at or during any time or times any property is conferred on or acquired by any person . . . What is important is that the subsection distinguishes “ promises of or agreements for a lease of property” from other instruments whether formal leases or not which confer a present right to use property.

There  might be some doubt about whether that is a true distinction or whether it is an either/or distinction or an either will do distinction.  But, in any event, they say:

It is elementary law that an agreement for the grant of a lease without entry by the lessee or payment of rent confers no right of property at law and does not operate as a demise –

It was for that reason that the court concluded that the right to use part of the definition was not invoked.  It is in that context that the observations at the foot of the page, which my friend read to the Court, were made.  Then they went on to say that part of the definition dealing with lease or agreement for lease was not attracted by the amending deed because in its terms it made no provision for a lease or agreement but merely amended.  That is now dealt with by section 169, a predecessor to which was enacted following the decision.

Your Honours, if I could turn to the second issue.  We would say that on the first issue we are entitled to succeed because the consideration given by the appellant under the access agreement was given for all the rights that accrued to it under the rail access agreement and the statute which was invoked by the rail access agreement.  So the cost is for all of those rights and all of the cost is dutiable.

As to the second issue, much of what I wanted to say about that has already been said in the response to the questions put to me by the presiding Judge.  One thing that I would like to add to what we have said is this.  It is a general principle both of contractual construction and of statutory construction that a document is to be construed so as to make it effective or to give it business efficacy in the case of a statute to cause it to achieve its ends rather than have them frustrated.  An agreement or a statute which conferred rights which could not be exercised because the subject matter of the rights could not be reached or could not be the subject of access without the supplementary or implied rights would be frustrated. 

We have put that in somewhat different language in paragraph 34 of our submissions.  I should perhaps have added to them the familiar reference to Codelfa Constructions, which I do not think I need to take your Honours to.  Perhaps the more recent case of Concrete v Parramatta Design 229 CLR 577 – the note I have is the judgments of Justices Kirby and Crennan at paragraph 59, the judgment of your Honour the presiding Judge at paragraphs 5 and 16 and the judgment of Justice Callinan at 163 all deal with the extent to which entitlements must be implied or construed into a document to give it efficacy.

Our friend says that the response to that is that clause 5.1 in this case excludes the need for such an implication but, as has already been the subject of discussion between Bench and Bar, clause 5.1 only gives rights in accordance with or as permitted by the access agreement and, in our submission, that implies that an access agreement must confer on the party to it all the rights of Rail Infrastructure Corporation in relation to the land such as to make the access agreement effective. 

We observe that clause 2 in subclauses (2) and (3) give Rail Infrastructure Corporation power to deal with or to do anything appropriate with the property vested in it.  That, in our submission, means that it had the power to confer what is in effect a sub‑licence of its rights.  We would say that directly as well as in the manner which your Honour, the presiding Judge put to me earlier, the access agreement confers the rights which are provided for by the statute. 

In the written submissions we have given the Court such assistance as we can on the meaning of the word “by” in other contexts.  I do not wish to take that any further except to observe that the context in the present case is a duty statute and the purpose of a duty statute is to exact duty.  It would be a very strange reading of a duty statute that construed it in a way which excluded from its ambit an arrangement which had the consequence that a party, given rights under the agreement, was in consequence of entering into the agreement, given those rights. 

The other observation which we seek to press upon the Court in relation to the Duties Act is this, that its general tenor is to impose duties upon the recipient of property, that is, to have regard to what is received rather than what is given.  I can give your Honours some references to the language of the Duties Act in that regard.  Section 13 imposes duties in respect of transfers upon the transferee.  Section 128 imposes duty in respect of capital reductions upon the recipient of the reduction amount.  Section 134 imposes duty in respect of land use entitlement transactions upon the allottee of the entitlements.  Section 141 imposes duty in respect of allotments by direction on the allottee.  Section 163J in the case of land rich companies imposes duty on the acquirer of interests in the companies and section 169, turning to Chapter 5, imposes duty upon the lessee.

In our submission, the Duties Act is not concerned with the source of property, but with whether property is acquired or whether rights are conferred.  So that to direct attention to the source of the rights is to mistake the issue posed by the Act.  That was the point which was made by the Court in Commissioner of Stamp Duties v Buckle 192 CLR 226 in the passage at pages 240 and 241. We have set that passage out in our written submissions, and perhaps I will not take the Court’s time to read it again.

In our submission, section 164A directs attention to what is acquired by the lessee and in the present case what is acquired is rights to use.  It does not direct attention to what Justice Gzell called and my friend adverts to as the source of the rights.  It is directed to the means by which or owing to which, to pick up the language of the Court in Buckle at paragraph 32, the rights were acquired.

In the case of those of the rail infrastructure facilities which themselves comprise land, clearly such rights are acquired by virtue of clause 2.4.  In the case of those of the rail infrastructure facilities which comprise choses in possession, title to which is separated from the land to which they are attached and vested in somebody other than the landholder, nonetheless, the use of the land occupied by or surrounding those choses in possession to the extent necessary to make the access rights efficacious is a right which is conferred on the party to the access agreement, the lessee, to prejudge the issue by the agreement itself.

Your Honours, we have drawn attention towards the end of our written submissions to the circumstance that this is not a new idea.  Justice Windeyer in Wade v New South Wales Rutile Mining Co 121 CLR 177, a passage which is set out in our submissions at paragraph 38, observed that:

The Crown is empowered to grant leases of private lands, not for mining for Crown minerals, but for various ancillary purposes, the land so leased not being part of the land being mined.  . . . This is authorized by the statute.  Nevertheless it is not easy to accommodate such a transaction with ordinary concepts of law.  . . . In substance therefore the arrangement is in the nature of a compulsory lease by the owner.  But in form it is a defiance of principle.  The Crown is stated to be the lessor.  . . . The reservation of rent to the landowner is therefore to a stranger to the lease.  . . . a lease by the Crown of lands held by a subject, perhaps as a tenant in fee simple – and continuing after the lease to be so held by the subject – is a novel notion in law.

Those words are perhaps prophetic of the approach which has been taken in legislation dealing with infrastructure projects as a result of the competition principles agreement, and this is one example of novel notions in law.

The point which we draw from that is that in a legal sense the source of the rights conferred on the holder of an expiration licence or a mining lease is in the land which is owned by the landowner, but it is invested in the mining lease holder by action of the Crown.  If an issue arose as to the liability to duty, the Duties Act would look to the acquisition, not to the source of the right. 

Another example, perhaps more indirectly in point, is the decision in Buckle’s Case.  That case concerned a power of appointment.  The rights which were vested in the appointees by the appointment sprung not from the appointment itself.  It was not the source.  The source was the original settlement, but the appointment was what made it efficacious.  The court concluded that it was the appointment whereby or by which the property vested in the appointee and in the same way, in our submission, in this case.  It is the rail access agreement which is the agreement evidenced by the instrument upon which duty has been claimed which is the agreement by which the rights of Pacific National were acquired by or conferred on it.  If the Court pleases.

GUMMOW J:   Thank you, Mr Slater.  Yes, Mr Gageler.

MR GAGELER:   May I deal with just two things in reply.  One is your Honour Justice Gummow’s question to my learned friend.  The other is his reliance on Buckle.  In relation to your Honour Justice Gummow’s question, your Honour was looking at clause 5(1) of Schedule 6A to the Transport Administration Act.  Your Honour was lining it up against section 164A(b) of the Duties Act and your Honour pointed out absolutely correctly in absolute correct language, in our submission, that it is only upon a person entering into an access agreement that a right is fully vested and accrues under clause 5 of Schedule 6A.  That is absolutely correct.

If you then line that up against the statute and if you look at section 166(1)(a), it is very difficult to describe the right that is fully vested and which accrues under clause 5 of the Schedule as a right under the lease.  Similarly, your Honours, although we accept that the language is more contestable when one gets to section 164A, but read in that context, it is difficult, in our submission, to read it as a right that comes by the agreement in section 164A(b).  It is, as your Honour said in other language in the course of asking the question, an accrued statutory right.  An accrued statutory right is not a right of the nature that has been referred to in section 164A.  Your Honours, that is dealing with that question. 

Our learned friend placed some reliance on Buckle.  Buckle, of course, is a case which dealt in passing with the meaning of the word “whereby” in another provision of the 1920 Act. That was section 65. Section 65, your Honours, set out in Buckle 192 CLR 226 at the bottom of page 239 and what section 65 referred to, amongst other things, was a conveyance, decree, judgment or order of any court whereby any property in New South Wales is transferred or vested. The Court in Buckle was not concerned with the meaning of the word “whereby” any analogous context.

KIRBY J:   I notice that Justice McHugh on page 229 in the course of argument said:

The word “whereby” requires you to look to causative effect.

MR GAGELER:   Yes.  If it did in this case, we lose.  But that did not manifest itself in the judgment, your Honour.  At page 233, paragraph 6, the second sentence of that paragraph makes clear that it was accepted, that is common ground, that:

the Supplemental Deed constituted a conveyance of property within s 65 of the Act –

Then if you go over to page 240, the last line:

The issue is one of identification of that property in New South Wales which, by means of the instrument, was transferred to or vested ‑

That question of causation being sufficient or insufficient just was not the issue in the case. It was, however, the issue in another case that dealt with section 65, and it is a case we have given your Honours a copy of. It is referred to in our written submissions in reply at paragraph 5 and, indeed, in the respondent’s submissions at paragraph 18. It is Commissioner of Stamp Duties v Permanent Trustee Co Ltd (1987) 9 NSWLR 719 and, really, the relevant holding in the case one picks up from the succinct head note. There you had an order that was made under section 66G of the Conveyancing Act.  That was held not to be an order whereby any property is transferred to or vested in any person because the property vested only when there was a subsequent entry in the register.

If it is relevant to look at all to section 65 of the Stamp Duties Act and to draw an analogy between the use of the word “whereby” in that section and the use of the words “by which” in the present context, the better view is that cause and effect is insufficient.  Both sides have referred to your Honour Justice Kirby’s judgment and if your Honours look to the judgment of Justice Priestley at page 729 his Honour, really agreeing with Justice Lusher at first instance, said just below letter (d):

Lusher J concluded that the combined effect of the foregoing provisions of the Conveyancing Act, the Trustee Act and the Real Property Act precluded the order, of itself, transferring the land to, or vesting it in the plaintiff.

With respect, I agree with him.  That is another way of putting our essential point that, your Honours, when one is looking to the nature of an agreement that falls within section 166A(b) of the Act with which we are concerned, one is looking to an agreement which of itself has the relevant operation.  Those are our submissions, if the Court pleases.

KIRBY J:   I notice that at 721 I also agreed with the construction offered by Justice Lusher.  That apparently was the matter in debate in that appeal.

MR GAGELER:   Yes.  If the Court pleases.  I did not mention your Honour again because both sides did your Honour great justice in the written submissions.

KIRBY J:   I am not getting paranoid.  I know you did.

GUMMOW J:   Yes, thank you Mr Gageler.  We will reserve our decision in this matter and we will adjourn to 9.15 am tomorrow to dispose of some special leave applications and the next appeal will be listed for 10.00 am.

AT 3.50 PM THE MATTER WAS ADJOURNED