A solicitor has a right to retain a client's document until legal fees are paid, and lack of privity prevents a defendant from compelling release of the title deed.

[1] On 15 November 2011, Justice Abdul Rahman Sebli, Judge of the High Court of Sabah and Sarawak, sitting at Kota Kinabalu, allowed the respondent's [ie, the defendant before the High Court] claim against the appellant [ie, the third party before the High Court] for an injunction to compel the appellant to produce and deliver the title country lease No 215398557 ("the title Deed") to the plaintiffs (who are the purchasers in the action and the plaintiffs before the High Court, but not a party to this appeal) within 30 days from the date of the Order with cost to be taxed between the plaintiffs and the defendant in the High Court. The learned High Court Judge also allowed the respondent's claim that the respondent be fully indemnified by the appellant against liability in respect of the 1st and 2nd plaintiff's claim for costs and damages, if any.

[2] The reason given by the learned High Court Judge is that the plaintiffs have the right of possession over the document of title and it is the defendant's responsibility to deliver the same to the plaintiffs as stipulated in cl 11 of the sale and purchase agreement. The learned High Court Judge also said that it is no defence for the defendant to say that the title is in the possession of the third party or that the plaintiffs have full knowledge of this fact. The learned Judge also allowed the defendant's third party claim on the ground that the third party cannot claim a solicitor's lien over the Deputy Registrar's decision, dated 6 August 2010, and that it is not the defendant's duty to discharge the solicitors lien of the third party over the document of title.

[3] This is the third party's appeal against that decision. In this appeal, the appellant shall be referred to as the 'third party' and the respondent as the 'defendant' unless otherwise stated. Reference to 'plaintiff is a reference to the plaintiff in the action before the High Court.

[4] On 17 May 2012, having heard the Counsels and having read the Appeal Records, we allowed the third party's appeal with the cost of RM10,000.00 to the appellant, ie, the third party and set aside the High Court Order dated 15 November 2011.

Facts Of The Case

[5] The plaintiffs were, and at all material times, the legal and beneficial owners of Lot No 3 Block 34B, Bandar Penampang Phase 2b, Mile 5 1/2 Penampang Road Kota Kinabalu, Sabah ("the property") held under the original document of title Deed. The plaintiffs had purchased the property from the defendant pursuant to a sale and purchase agreement ("the said sale and purchase agreement") dated 19 December 2003. The purchase price for the property was RM405,000.00 and the plaintiffs have paid the purchase price to the defendant in full.

[6] At all material times, the defendant was a company registered in Malaysia with its registered address at Wisma Damai Kota Kinabalu and was carrying on a business as a land developer.

[7] In it's statement of claim against the third party, the defendant claimed that it was a joint venture partner of Syarikat Batu Bata Koidupan Sdn Bhd (the landowner) by virtue of a JV agreement dated 2 May 1992 ("the JV agreement"). The defendant further claimed that by virtue of the JV agreement and a Deed of Assignment dated 30 March 2000 ("the deed of assignment") the defendant was entitled to sell the property to the plaintiffs. The defendant also averred that by letters dated 9 May 203 and 13 May 2003 respectively (the letters), the landowner instructed the third party to release all the titles (36 titles altogether, including the original title Deed