In south australia it was legisive requirement only. Because only the SA Goverment could operate railways up until I think AN took over SAR. The only difference between tramway/railway is a tramway company was only repositble for track and ballest. As a railway the SAR in this case was respositable for everything from one fence to the other and everything else in between eg track.
Since the Silverton Tramway didn't run in South Australia at all, SA legislation is irrelevant. In any case, the legislation defining a tramway is state-based, and may be different from state to state, and I am uncertain whether this definition is true in SA.