Mohd Yusoff Mohamed J:

This JUDGMENT is delayed because of my transfer to Kuala Lumpur and the dislocation of work there. I apologise for this.

The remedies sought by both plaintiffs in this consolidated action are for accounts arising from a loan granted and disbursed by the defendants.

Dato Au Ba Chi, (now referred to as 1st plaintiff), owned 51 pieces of lands at Bandar Penggaram, Batu Pahat, Johor. Descriptions of these lands are annexed to this judgment. He charged all these properties to the Malayan United Finance Bhd., (1st defendant), for a loan of RM3 Million to his company, known as Dato Au Development Sdn. Bhd., (2nd plaintiff). The loan was disbursed through L.S. Chua & Company, (2nd defendant), a firm of solicitors from the 1st defendant's panel of lawyers. It is alleged that the 2nd defendant, without the plaintiffs' knowledge, released RM500,000 from the loan sum of RM3 Million, to Kim Hiong Realty Sdn. Bhd., (Kim Hiong), and converted the same to the use of the 1st and/or 2nd defendants. In this respect a declaration is sought that the 1st defendant had wrongfully debited the plaintiffs' account with the said sum and interest as due to them from 25 June 1983.

In addition to these, the 1st plaintiff also claims for loss and damage due to the sale of his charged lands, as ordered by the Court, upon sale by public auction; and the 2nd plaintiffs for the return of the RM500,000 aforesaid and interest.

Stakeholder

The 2nd defendant was represented by Chua Lai Seng (DW4), the dominant partner of the firm, in its dealing with this loan.

Upon approval of the loan by the 1st defendant on 2 March 1983, (Exh. DBD 4-18), the 2nd defendant requested the release of the full sum of RM3 million to his firm as stakeholder. His firm's letter addressed to the 1st defendant at Exh. DBD 4-44, dated 21 June 1983, gave an undertaking to refund the whole sum in the event that legal charges of the 1st plaintiff's lands were not registered. On 25 June 1983, the 1st defendant released the money to the 2nd defendant, (Exh. DBD 4-48), as requested.

"as stakeholder", he is under a duty to hold it in medio pending the outcome of a future event. He does not hold it as agent for the vendor, nor as agent for the purchase. He holds it as trustee for both to await the event: see Skinner v. Trustee of the Property of Reed [1967] 3 All ER 1286 at 1287, per Cross J. Until the event is known, it is his duty to keep it in his own hands; or to put it on deposit at the bank. see Eltham v. Kingsman [1818] 1 B & Ad 683 and Hampden v. Walsh [1876] 1 QBD 189.

Lord Denning's view was a dissenting Court of Appeal decision but was later upheld by the House of Lord on further appeal. Wan Hamzah J, (as he then was), accepted and applied this view in Kuldip Singh v. L.L.N. [1983] 1 MLJ 257, a case of almost similar nature.

By instructions of the 1st defendant to the 2nd defendant, (Exh. DBD 4.24), the event to occur for the disbursement of the loan was the completion of the security documentation. This was in respect of legal charges on the 1st plaintiff's land enumerated in the letter and as per annexed list upon occurrence of that event the loan was to be released in full to the 2nd plaintiffs. The 2nd defendant did not do this.

Mr. Subra Naicker, on behalf of the 1st defendant, said that the 1st defendant had kept to its terms and released the loan to the 2nd defendants, as common solicitor, for the ben