1907. LTD. ORR. 89, 90.] The respondents, therefore, by virtue of their lease, and H. C. OF A. with the concurrence of the lessors obtained the lease of the foreshore from the Crown. That is alleged in the replication. Equity PERPETUAL will not allow them to have that benefit and repudiate the TRUSTEE CO. lessors' title. They stand in a fiduciary relationship to the lessors, and must account to them for the benefit they have derived from the original lease: Cuthbertson v. Irving (1); Griffith v. Owen (2). The replication is good as a traverse of the eviction. On the facts alleged there was never a cessation of the original possession. The lessees are on that ground estopped from setting up the eviction of their lessors. At any rate they cannot complain of being evicted from the foreshore. They knew the risk when they took the lease, and took that risk on themselves. The lessors also had the benefit of the restrictive covenant as to the Stockton Estate, and retained it by virtue of the lease of the residue of the lands originally leased. Under these circumstances equity would grant an unconditional perpetual injunction against the lessees claiming an apportionment. Knox K.C. (Dr. Coghlan with him), for the respondents. The appellants cannot succeed unless it appears from the replication that under the circumstances set up equity would grant an injunction against setting up the plea of eviction, without any conditions whatever. It must appear that no diminution whatever can be made from the rent claimed. The mere fact that the defendants had some benefit from the restrictive covenant in the lease, over and above the enjoyment of the residue of the lands, and therefore are not entitled to a full proportionate abatement of the rent, creates no estoppel, nor does it make the defence bad or inequitable. The extent of the apportionment is a matter for the jury. The replication is bad unless it supports a claim for an injunction without terms. [ISAACS J. referred to Mines Royal Societies v. Magnay (3).] Assuming that the lessees stand in the fiduciary relationship contended for by the appellants, the lessees would, at any rate, be entitled to an indemnity to the extent of the expense incurred in (1) 4 H. & N., 742; 6 H. & N., 135. (2) (1907) 1 Ch., 195. (3) 10 Ex., 489. H. C. OF A. obtaining the lease from the Crown, and other losses owing to the defect in the plaintiffs' title: Rowley v. Ginnever (1). 1907. [HIGGINS J. referred to Giddings v. Giddings (2); In re Biss : Biss v. Biss (3).] There is no such relationship arising out of the mere existence of the tenancy, and the replication does not allege that the defendants had knowledge of the reservation in the grant, or of any agreement between the lessors and lessees as to the obtaining of the lease from the Crown. There is, therefore, no equity against the defendants. [HIGGINS J. referred to Cooper v. Phibbs (4).] There is no estoppel, legal or equitable. [He referred to Willmott v. Barber (5).] The replication cannot be read as a traverse of the eviction. It admits it, but seeks to avoid the effect of it by setting up an alleged equity. The possession under the original lease cannot be said to have continued as to the foreshore. There is no need for an actual walking out under the old tenure and a formal entry under the new. There was at least a constructive eviction: Mayor of Poole v. Whitt (6). [GRIFFITH C.J. referred to Delaney v. Fox (7). ISAACS J. referred to Carpenter v. Parker (8); Fawcett on Landlord and Tenant, 2nd ed., p. 211.] The Crown Lands Acts give the plaintiffs no preferential right over the foreshore. That was wholly excepted from the grant: Attorney-General for New South Wales v. Dickson (9). Being excepted, it was Crown land and could be leased by the Crown for any of the purposes mentioned in sec. 90 of the Act 48 Vict. No. 18, without reference to the adjoining owner. The reservation of this strip excluded the plaintiffs from any privileges that might have attached to riparian ownership. The part under the sea was leased under sec. 89. The plaintiff's had no preferential rights over that because they were not owners of the frontage. [He referred to Shore v. Wilson (10); Smith v. Renwick (11).] (1) (1897) 2 Ch., 503. (2) 3 Russ., 241. (3) (1903) 2 Ch., 40. (4) L. R. 2 H. L., 149, at p. 170. (5) 15 Ch. D., 96. (6) 15 M. & W., 571. (7) 2 C.B.N.S., 768. (8) 3 C.B.N.S., 206. (9) (1904) A.C., 273, at p. 277. 398. Cullen K.C., in reply, referred to 48 Vict. No. 18, secs. 65, 66, H. C. OF A. 67, 68. 1907. LTD. [ISAACS J. referred to Lord v. Clyne (1); Stockport Waterworks PERPETUAL Co. v. Potter (2); Ormerod v. Todmorden Mill Co. (3); Chadwick TRUSTEE CO. v. Manning (4); George Whitechurch Ltd. v. Cavanagh (5); Bullen and Leake, Precedents of Pleadings, 3rd ed., p. 568. HIGGINS J. referred to Pickard v. Sears (6).] GRIFFITH C.J. This was an action by the appellants against the respondents for rent reserved upon a lease for a term of 23 years from 1st June 1882 at a yearly rent, payable quarterly, granted by the appellants' predecessors in title to the respondents' predecessors in title, by which the lessees covenanted to pay the rent on specified dates. The defendants as to a portion of the rent claimed, which was for part of the last year of the term, alleged, in effect, that before the rent became due portion of the land, namely, all that portion lying within 100 feet of the high water mark of the waters of Port Hunter, Newcastle, were Crown lands, and that the Attorney-General for New South Wales recovered judgment against the plaintiffs in an action of intrusion, and subsequently recovered judgment against the defendants in an action for intrusion, in respect of the same portion, with damages. The plaintiffs pleaded a replication upon equitable grounds to which it will be necessary to refer later, but which I need not now state in detail. In effect, they set up that under the Crown Lands Acts in force in New South Wales the plaintiffs were entitled to a preferential right appurtenant to the rest of the land to acquire that strip of land from the Crown, and that the defendants by taking advantage of that preferential right had obtained from the Crown a lease of the 100 feet, and say that under these circumstances the plea of eviction followed by diminution of the rent is not applicable. In the Crown grant, which was produced to us, and to which we are allowed to refer, the parcel of land granted to the plaintiffs' predecessors in title is described as bounded by the waters of Port Hunter with an exception in (1) 2 N.S. W. L.R., 36. (2) 3 H. & C.. 300. (3) 11 Q.B D., 155. VOL. IV. (4) (1896) A.C., 231. (5) (1902) A.C., 117, at p. 130. 90 ORR. 17th May. 1907. PERPETUAL LTD. v. ORR. H. C. OF A. these words:-"Saving and reserving to His Majesty all such part of the land as may be within 100 feet of high water mark.” The effect of a reservation in that form has been stated by the TRUSTEE CO. Judicial Committee of the Privy Council in Attorney-General for New South Wales v. Dickson (1), where Lord Lindley, in delivering the opinion of the Judicial Committee, said: The effect of this Griffith C.J. last reservation is not open to any serious controversy. If the strip in question belonged to the Crown at the date of the grant, the strip was excepted from the grant. The word 'reserving' would operate as an exception." The authorities quoted in support of this proposition were Sheppards' Touchstone, pp. 78 et seq., and Coke upon Littleton, 143a. The defendants contended that this strip of land was not included in the Crown grant at all. I think it must be conceded that that follows from what I have just read. But it is clear that Lord Lindley was not directing his mind to the question of any other consequences that might follow in New South Wales with regard to the power of the Crown to deal with the strip. The plaintiffs contend that the Crown cannot deal with land reserved under such circumstances, and rely upon various sections of the Crown Lands Act 1884. Sec. 63 of that Act provides that the Governor may authorize the rescission of any reservation of water frontage on the sea coast or other navigable water or of land adjoining such frontage contained in any Crown grant subject to such conditions and restrictions as he thinks fit. The land, the subject of such rescission, "may be granted" to the owner of the land contained in the Crown grant at a price to be fixed in the prescribed manner (in a former Act the words were shall be granted "), provided that nothing in this section shall empower the Governor to grant any land used as a public thoroughfare or any land set apart for any public purpose. As I understand the judgment of the learned Judges of the Supreme Court, they thought that that section gave no preferential rights to the owners of the land comprised in the Crown grant. In the view I take of the case it is not necessary to pronounce any definite opinion on that subject; but, as at present advised, I think that the powers of the Crown to deal with land falling within that (1) (1904) A.C., 273, at p. 277. category are limited by the provisions of sec. 63 to a certain H. C. OF A. extent. The Act of 1884 provides for the reservation of land in 1907. LTD. v. ORR. Griffith C.J. various ways. Under sec. 103 the Governor may in certain PERPETUAL cases reserve temporarily from sale Crown lands on either side TRUSTEE CO. of a railway. By sec. 104 he may reserve or dedicate Crown lands for any of a number of specified purposes. Sec. 63 makes no provision for reserving Crown lands, but recognizes the case where there has been a reservation of a water frontage on Crown lands or lands adjoining a water frontage. I am disposed to think, though I express no definite opinion on the subject, that, under the reservation referred to in sec. 63, where there has been such a reservation, though the lands are Crown lands, still they are not such Crown lands as can be disposed of for all the purposes that are open in the case of land that has not been the subject of previous disposition, using the term disposition in its widest sense, especially having regard to the proviso that the Crown cannot grant such land if it is used as a public thoroughfare or set apart and dedicated for any public purpose. Reference was also made to sec. 68, which provides that on an application for purchase under any of the last five preceding sections, including sec. 63, certain consequences shall follow, one of which is that if the applicant for purchase, which, in the case of sec. 63, would be the owner of the rest of the land originally described in the grant should fail to complete, the right of purchase may be treated as having lapsed, and the land itself may be sold by auction, or otherwise disposed of pursuant to the provisions of the Act. There is no doubt that negative provisions may be inferred from positive words there is ample authority for that—and I am disposed to think that under these circumstances the Crown could not grant the lands now in question to anybody except the original grantee until the conditions stated in sec. 68 had been fulfilled. Though I am disposed at present to take that view, it does not carry the plaintiffs very far, because the title which the defendants say they have obtained from the Crown is under a lease of some of this land, and by sec. 90 it is provided that the Governor may, amongst other things, lease Crown lands in specified areas for any of the purposes thereinafter specified for a term not exceeding fifteen years, |