In 1926 an agreement was made between the Commonwealth and the State of South Australia for the construction by the Commonwealth, at its own expense, of a railway of 4' 8¹⁄₂" gauge from Port Augusta to Red Hill. The State undertook by the agreement to lay, during the construction of the above-mentioned railway, a third rail from Red Hill to the Central Railway Station in Adelaide at the expense of the Commonwealth, so that there might be a continuous railway of 4' 8¹⁄₂" gauge from Port Augusta to the Central Railway Station in Adelaide, and the State undertook other obligations in respect of the running of the railway upon its completion.

The agreement provided that it should not, apart from preliminary provisions, have any force or effect until approved by the Parliament of the Commonwealth and the Parliament of the State, and until the State had given all necessary consents to the Commonwealth for the construction, extension and working in the State of the railway.

The agreement was approved by the Commonwealth Parliament by the Railways (South Australia) Agreement Act 1926 which was assented to on 15 February 1926.

The State passed in the same year the North South Railway Agreement Act 1926. That Act approved of the agreement above-mentioned. Section 3 of the State Act is as follows:

The State hereby consents to the construction and carrying out by the Commonwealth of the railways and railway works and operations which the Commonwealth undertakes by the Agreement to construct and carry out: Provided that if the construction of the railway from Port Augusta to Red Hill referred to in the Agreement is not commenced by the Commonwealth within such period (being not less than three years from the date of the commencement of this Act) as is notified to the Prime Minister of the Commonwealth by the Premier of the State within twelve months after the said commencement, the consent given by this section shall as regards such railway be null and void.

The State Act commenced on the date of its assent, viz., 25 February 1926.

The Premier of the State did not within 12 months from 25 February 1926, give to the Prime Minister of the Commonwealth a notification as mentioned in the proviso to the section above quoted. In October 1927 the question was submitted to the Crown Solicitor for advice whether the consent contained in section 3 of the State Act was effective, and that the Commonwealth then had the full and free consent of the State to build the railway. The Crown Solicitor advised that, as the time specified in the proviso had expired, and as no notification had been given within that time, the proviso was inoperative to affect or limit in any way the consent given by the State in the opening words of section 3.

While inclined to agree with the Crown Solicitor’s view, the Secretary of the Attorney-General’s Department, expressed the opinion that there was room for another possible interpretation of the State Act, viz., that the consent of the State was conditional on a notification being given within a prescribed time. In view of this possible interpretation, the Attorney-General had suggested to the Prime Minister that the South Australian Government be invited to amend the proviso to section 3 of the State Act. The State of South Australia in 1927 introduced a Bill for the purpose of giving consent to the construction of the railway by the Commonwealth provided it was commenced within three years. After passing the lower house this Bill lapsed in the Legislative Council.

In 1930, the State not having amended its Act as suggested, the Commonwealth passed the Port Augusta to Red Hill Railway Act 1930. This Act recited in its preamble, inter alia, that, by reason of the fact that the Premier of the State did not, within the period of 12 months, notify the Prime Minister in accordance with section 3, doubts had arisen as to whether the consent of the State to the construction of the railway by the Commonwealth was still in full force and effect, and that it was expedient that these doubts should be removed before the commencement of the Act of 1930. The Act of 1930 gave to the Commissioner for Railways power to extend the Trans-Australian Railway by the construction of a railway from Port Augusta to Red Hill in the State of South Australia. The route of the railway was described in the Schedule. The Act, however, was declared not to commence until a date to be proclaimed, and it was provided that the Proclamation fixing the date of the commencement of the Act should not issue until the Governor-General had, by notification in the Gazette, declared that all doubts as to whether the consent of the State of South Australia to the construction of the railway by the Commonwealth was in full force and effect had been removed. The State, for various reasons, now objects to the construction of the railway and the matter has been the subject of an opinion by the State Crown Solicitor.

Paragraph (d) of clause 5 of the agreement is to the effect that, in approving and consenting to the said railway from Port Augusta to Red Hill the State may, if it thinks fit, provide that such approval and consent shall lapse and be of no effect if the construction of that railway is not commenced by the Commonwealth within a period to be specified by the Premier of the State, not being less than 3 years from the date of such approval and consent. By associating this provision with the proviso to section 3 the State Crown Solicitor draws the conclusion that the State intended that the consent given was to be conditional upon the construction of the railway being commenced by the Commonwealth within a period fixed by the Premier by notification to the Prime Minister, and that that period should not be less than 3 years from 25 February 1926.

In my opinion, no such conclusion can be drawn from the words used whatever the intention of the State may have been. As a matter of fact, the State did not provide that its approval and consent should lapse if the railway were not commenced within a period specified by the Premier, and accordingly the provision of the agreement referred to, never having been exercised by the State, is inoperative, and the whole question turns on the construction of the proviso to section 3 of the State Act.

The State Crown Solicitor states that the legal obligation of the Commonwealth was to carry out its obligations to construct the railway within a reasonable time. This view cannot, in my opinion, be supported in relation to an obligation arising under an agreement embodied in a statute. In my opinion the proper construction of section 3 of the State Act of 1926 is that consent was given by the State, in unequivocal terms, to the construction of the railway by the Commonwealth in accordance with the agreement that the consent was, by the proviso to section 3, capable of becoming nullified in the event of certain action being taken, and circumstances arising. The circumstances in which the consent became null and void were that, if the Premier of the State notified the Prime Minister within 12 months after the commencement of the Act of a period within which the Commonwealth should commence the construction of the railway, the Commonwealth should fail to commence that construction within that period. The initial step in this course of action not having been taken within the specified time, the proviso becomes inoperative, and the consent remains in full force and effect.

In connexion with the foregoing, consideration should be given to the question whether the Port Augusta to Red Hill Railway Act has any effect upon the question whether section 3 of the State Act of 1926 operates to give the State’s consent to the construction by the Commonwealth of the railway.

The preamble as stated above recites that doubts have arisen as to whether the consent of the State is still in full force and effect and that it is expedient that those doubts should be removed.

The declaration of the removal of the doubts is a condition precedent to the commencement of the Act, the main purpose of which is to authorise the Commissioner for Railways to proceed with the construction of the railway.

In my opinion it is competent for the Governor-General, upon being satisfied that the doubts have been removed, to declare at any time that the consent of the State is in full force and effect. Although at the time of the passing of the Act of 1930 there may have been doubt as to the legal interpretation and effect of section 3 of the State Act of 1926, it is competent for the Governor-General if, upon re-consideration of the matter, he thinks that the consent contained in the opening words of section 3 is beyond doubt effective, to declare that the doubts which previously existed have been removed and thereupon a Proclamation may be issued fixing the date of the commencement of the Act of 1930.

At the same time, as the legislative position is the same as it was when the Commonwealth Parliament declared that doubts had arisen, and in the meantime no action, other than further consideration of the legal questions arising, has been taken, I think it would be desirable that Parliament should be invited to pass an amending law declaring that the doubts which had existed have been removed, and accordingly repealing sub-section (2) of section 2.

In conclusion, I desire to point out that I note the following passage in the State Crown Solicitor’s Opinion:

The views of our Railways Commissioner as to the impracticability and danger of the third rail system, and the large annual loss which the State is likely to suffer by the diversion of traffic from existing lines, are obviously of great weight and should be placed before the Commonwealth Government.

I understand that the Commissioner referred to is Mr C. B. Anderson who in 1926 was acting as the Chief Engineer of the South Australian Railways. It is therefore interesting to recall that, in the evidence taken before the Parliamentary Standing Committee of Public Works in 1926 when it was dealing with the proposal to extend the Trans-Australian Railway from Port Augusta to Red Hill and to lay a third rail between Red Hill and Adelaide, Mr Anderson gave the following evidence:

I consider that the sleepers on the railway between Red Hill and Adelaide are sufficiently sound to take the third rail. I do not anticipate any early replacements, nor do I anticipate any constructional difficulties in laying the third rail. I see no reason to suggest any restriction
on the speed of trains by reason of the laying of the third rail. In my opinion the third rail is practicable and absolutely safe.

[Vol. 28, p. 68]