The car clipped the fence and ''took out one post'', he said.
The woman, a local, was trapped in the car before being cut out by Edendale firefighters and transferred to an ambulance.
The Otago Regional Rescue Helicopter arrived about 2.30pm and the woman was flown to Dunedin Hospital.
The train, a locomotive, travelling without wagons, stopped about 200m from the crash site.
Fire engines, ambulances and police from Gore, Edendale and Invercargill attended.
The area is known as ''Halliday's Corner'' because the road crosses the railway line in a tight S bend.
The crossing has stop signs and crossing warning signs, but no bells or lights.
Adrian Halliday, whose family has farmed at the corner for 100 years, said yesterday's crash was the third he knew of.
From what he saw, the woman was ''bloody lucky'' to be alive.
''There was wreckage on both sides of the railway lines. It must have been some impact.''
He said he was working in his workshop about 500m from the crossing when he heard a ''long, loud, low pop'' but did not realise a car had been hit because there was no loud bang or crash.
It was surprising there were not more crashes on the crossing as too many drivers did not stop or look before proceeding, he said.
''I see close calls all the time. Often it is local people who get complacent.''
He said he did not know what more could be done to make the crossing safer.
''They [Kiwirail] can't do any more in the way of warnings, and I can't see them putting bells on a rural crossing like this.''
Two people sustained minor injuries when the car in which they were travelling was clipped by a passenger train at a rail crossing near Te Horo, on the Kapiti Coast, yesterday.
None of the train's more than 100 passengers was injured and the train continued its journey soon after the 6.30pm incident.
