JUDGMENT

Eusoffe Abdoolcader J:

This case posits and demonstrates yet once again the perils solicitors face in acting for more than one party in property transactions and in consequence constraining them not infrequently into adopting invidious and untenable partisan positions in the event of ensuing conflicts of interests.

We need only state the facts of this matter somewhat concisely in view of the grounds advanced in the presentation of this appeal. The respondent is a company providing finance for housing development in the country and was appointed by the Government of Malaysia in January 1977, to implement the Government's Low Cost Housing Finance Programme (`the programme') under which the respondent is to provide end-finance to developers of approved low cost housing projects and for that purpose to provide loans to the purchasers of such houses. For any housing project to qualify for financing under this programme, the selling price of each housing unit inclusive of the land cannot exceed RM20,000.

In June 1977 Arief Trading Sdn. Bhd. (`the developer'), applied to the respondent for end-finance for its housing project known as Tasek Jaya Baru, and in its application the developer stated that the purchase price of each housing unit was RM19,250 and that its solicitors were the appellant. The respondent approved the application for end-finance for 85 units in a total loan commitment of some RM1,457,100. In November 1977 the individual purchasers of the several units applied to the respondent for loans through the developer and in their applications the purchasers confirmed that the purchase price of each unit was RM19,250. It is clear from the record that the appellant was at all material times acting as solicitors for the respondent, the developer and the purchasers. The appellant then on the instructions of the respondent dealt with the matter and prepared a report on the titles of the land involved which disclosed that the land was charged to Keng Soon Finance Berhad (`Keng Soon') to secure a loan then still outstanding, and on the advice of the appellant that the separate titles to be issued to the purchasers should be free from incumbrances and as the developer was unable to discharge its debt to Keng Soon, the respondent, again on the advice of the appellant, paid the amount outstanding to Keng Soon on behalf of the developer to redeem the charges and this was to be treated as partial disbursement of the loans granted to the purchasers. The respondent paid the money on condition that on the discharge of the charges in favour of Keng Soon, the transfers of the 85 units to the purchasers thereof and the charges thereon by the latter in favour of the respondent should be presented for registration simultaneously, and indeed the appellant gave an undertaking to that effect and another undertaking for the refund of all moneys paid to it on behalf of the developer if the charges were not presented for registration by a specified date.

The respondent on obtaining the issue documents of title for the 85 units and other relevant documents from Keng Soon handed these to the appellant for the requisite documentation. Without going into any detailed elaboration it would suffice to say that disputes then developed between the appellant and the developer who appointed new solicitors to act for it and also between the purchasers and the developer. The purchasers alleged that the developer had collected from each of them some RM3,750 and certain other sum for extras which apparently were never provided and they alleged fraud on the part of the developer and also that as a result of these payments by them the purchase price for each unit had increased to beyond the maximum stipulated for the purposes of the Programme. The appellant had caused the transfers in favour of the purchasers to be registered but in spite of repeated requests by the respondent failed to register the charges in its favour in respect of 82 units. The reason for t