JUDGMENT

Hashim Yeop Sani SCJ:

The appellant is an advocate and solicitor and the respondents are a housing developer. The respondents retained the appellant as their solicitor on 10 April 1980. The respondents as plaintiffs in the Court below went before the learned Judge with an originating summons praying for an order that the appellant (defendant) deliver to the plaintiffs a list of all monies which have accrued as interest on the 5% of the purchase price which had been retained by him in respect of the sale of certain houses.

Before the learned Judge it was common ground that-

(a) the defendant is an advocate and solicitor;

(b) the plaintiffs were the developers and vendors of houses built on land held under EMR Nos. 490, 355, 266, 492 and Grant No. 1481 for Lot Nos. 388, 371, 420, 353 and 419 respectively in the mukim of Kamunting in the district of Larut & Matang in the State of Perak;

(c) the defendant was appointed as solicitor acting for the plaintiff company.

It was not disputed that 5% of the purchase price was retained by the appellant to be paid to the respondents as soon as the certificate of fitness was issued and that at some stage the certificate of fitness was in fact issued and the total amount of the deposit paid to the respondents. It was also not disputed that after the appellant refused to comply with the request of the respondents on the interest the respondents discharged the appellant as their solicitor on 9 November 1983 and engaged in his place Messrs. Lee Beng Cheang & Co.

The learned Judge granted the application of the respondents and in his grounds of judgment he said:

Having considered the affidavits of both the plaintiffs and the defendant I am of the view that at all material times the defendant was acting as a solicitor for the plaintiffs' company. He is an agent of the plaintiffs. It follows therefore that the money he received from the purchasers are held by him as an agent and not as a stakeholder.

In the earlier part of his judgment he said that as solicitor the defendant acted as an agent of the plaintiffs and the terms of the sale and purchase agreement did not change the fact that he was an agent. Therefore as agent he was liable to account for whatever money he received for the plaintiffs including interests.

The crux of the matter therefore is whether the appellant was a stakeholder or whether he was a solicitor acting for the plaintiffs at the time he received the 5% deposit of the purchase price.

A copy of the sale and purchase agreement between the respondents and the various purchasers of the houses is to be found at pp. 32-44 of vol. 2. clause 3 of the agreement subjected the payments under contract to such other methods of payment as may from time to time be allowed under the Housing Developers (Control and Licensing) Act 1966 and any rules and regulations made thereunder and para. (h)(ii) therein provided that a sum equivalent to 5% of the purchase price be paid "to the vendor's solicitors or some other person or company authorised by the controller as stakeholder" for payment to the vendor on production of the certificate of fitness for occupation if any to the said building. This clause is in fact a reproduction in substance of paragraph 1(h) of schedule C to the Housing Developers (Control and Licensing) Rules 1970 on payment of instalments. The whole of paragraph 1(h) of the schedule reads as follows:

(h) On delivery to the purchaser of vacant possession of the housing accommodation and the land as provided in r. 12(1)(o) or on completion of the transfer of the property as provided in r. 12(1)(p) whichever shall first happen the balance of 10 per cent of the purchase price, 5 per cent of which shall forthwith be paid to the licensed housing developer and the remaining 5 per cent shall be paid to the licensed housing developer's solicitors or to such other person as may be approved by the Controller as stakeholders to be paid to the licensed housing developer only on prod