KUALA LUMPUR, Sept 3 — The Court of Appeal has set aside findings of fraud and conspiracy against a businessman and property agent in a dispute over a proposed RM52.2 million sale of a 22ha tract of land in Johor.

However, a three-member panel upheld the High Court’s findings that no binding sale agreement had been concluded and that businessman J. Siva Kumar had wrongfully lodged a private caveat over the land.

The panel comprising Justices Datuk Azhahari Kamal Ramli, Datuk Ahmad Kamal Shahid and Datuk Ong Chee Kwan delivered its decision in two consolidated appeals arising from the High Court’s judgment dated January 22, 2024.

The first appeal was brought by Siva and Ammsa Property Sdn Bhd, while the second was filed by property agent R Thevandran K. Ragavan, also known as Thevan.

The dispute concerns a 22.06ha agricultural tract held under Lot 49259, Geran 5238, Mukim Plentong, Johor Bahru, owned by Firwas Sdn Bhd.

Siva and Ammsa had sought specific performance of an alleged sale and purchase agreement with Firwas.

In its decision, the Court of Appeal held that the High Court had gone beyond Firwas’ pleaded case when it made findings of fraud and conspiracy against Siva, Thevan and lawyer G Shoba without those causes of action and their constituent facts having been pleaded with the required particularity.

The appellate court therefore set aside the findings of fraud and conspiracy and overturned the High Court’s declaration that the alleged sale and purchase agreement was “illegal, fraudulent, void ab initio”.

The court nevertheless held that the agreement remained unenforceable as there had been no concluded agreement between Siva and Firwas, nor any binding authority on Firwas’ part to enter into such an agreement.

It also upheld the finding that Siva had wrongfully lodged the private caveat over the land.

The court rejected Siva’s argument that an earlier High Court decision dismissing Firwas’ application to remove the caveat prevented a subsequent finding that it had been wrongfully lodged.

The Court of Appeal held that the earlier proceedings were interlocutory in nature and had not determined the parties’ substantive rights at trial.

On damages, the court allowed Firwas’ cross-appeal and ordered interest on the RM52.2 million sum to be recalculated at eight per cent per annum from September 22, 2020 until the date of judgment.

Siva and Ammsa were also ordered to pay RM80,000 in costs for their appeal.

Meanwhile, Thevan’s appeal over his claim for RM1.2 million in agency fees was dismissed.

Although the findings of fraud and conspiracy against Thevan were set aside, the Court of Appeal upheld his liability for breach of fiduciary duty.

The court ordered him to pay RM100,000 in aggravated damages and for the RM1.2 million earnest deposit he had retained to be paid to Firwas towards satisfaction of the judgment debt.

Shoba, who did not appeal, remains liable for breach of fiduciary duty as a partner of the law firm involved in the transaction.

The case dates back to negotiations in 2017 and 2018, when Firwas sought to sell the Johor land for RM60 million.

Thevan had introduced Siva as a prospective purchaser. The negotiations eventually broke down and Firwas sold the land to another party for RM58 million.

Siva subsequently proceeded with an alleged sale agreement and lodged a private caveat over the property, leading Firwas to take legal action.

The High Court had ruled in favour of Firwas in January 2024, making strong findings of fraud and conspiracy and awarding damages over the wrongful caveat.

The Court of Appeal’s latest decision removes those fraud and conspiracy findings but leaves intact the key finding that there was no binding sale agreement and that Siva’s caveat was wrongful.