Zakaria Mohd Yatim JCA:

[1] This is an appeal against the decision of Mohd Ghazali bin Mohd Yusoff JC, who made an order on 6 August 1994 granting a Mareva injunction against the defendant. He made the order after hearing the plaintiff's application by summons in chambers interpartes.

[2] The respondent is a foreigner who resides at No 100, Clark Street, Keyport, New Jersey, the United States. The appellant's last known address is at No 270, Jalan Serampang, Pelangi, Johor Bahru.

[3] The following facts are not in dispute. For some years prior to 20 June 1989 the appellant and the respondent were good friends. They visited each other at their respective homes and travelled overseas together. In late 1988, Elastomers Limited, a company of which the respondent is a director, was considering locating its plant in Johor Bahru. The company is carrying on the business of selling sealants. The respondent sought the assistance of the appellant to find a suitable location for his company's plant in Johor Bahru. The appellant advised the respondent to incorporate a local company in Johor Bahru. The respondent sought the appellant's assistance to find an accountant to set up the local company. On the appellant's recommendation, Messrs Lau & Co (now known as Messrs Park & Associates) was appointed by the respondent. Early in 1989 the appellant arranged for the respondent to meet the assistant director of the Malaysian Industrial Development Authority (MIDA) in Johor and thereafter the respondent began to collect some data that was necessary to meet the requirements of MIDA. The respondent contends that the appellant advised him that it would be beneficial for him to obtain pioneer status for the company. The appellant and the respondent went around to look for a suitable piece of land to set up the respondent's factory. The land known as HS(D) 6373, Lot No 4170 Mukim Tebrau, District of Johor Bahru was at one point of time registered In the name of Sepi Sdn Bhd, a company in which the appellant is a shareholder and director. The appellant encashed cheques given to him by the respondent totalling RM500,000. The appellant also signed an undated declaration of trust. The appellant is the registered owner of an undivided half share of all that piece of land comprised in HS(D) 40767, known as Lot No PTD 18779 together with a building erected thereon known as No 270, Jalan Serampang, Pelangi, Johor Bahru, which is the appellant's place of residence and which is the subject of the Mareva order. The appellant is also the registered owner of RM210,000 shares in Sepi Sdn Bhd, the shares are also the subject matter of the Mareva order.

[4] The disputed facts are as follows:

[5] The respondent alleges in the statement of claim that the appellant had induced him to part with the sum of RM500,000 to the appellant by making a representation to him that in order for the appellant to obtain pioneer status from the company to be incorporated, MIDA had to be satisfied that Elastomers had a deposit of RM500,000 in a Malaysian Bank. The appellant made the representation orally to the plaintiff on 15 May 1989. The respondent contends that the said representation was false and untrue and that MIDA did not impose such requirement. By means of the said representation the respondent did cause to be handed over to the appellant to be kept on fixed deposit in an account with a Malaysian bank a sum of RM500,000. The said sum of RM500,000 was not put in a fixed deposit account by the appellant although the appellant had misled the respondent into believing that the appellant had done so as he remitted to the respondent in the United States some monies as purported interest derived on the safe deposit account. The respondent further alleges that the appellant falsely represented to him that the appellant had bought a piece of land known as HS(D) 6373, Lot No 4170, Mukim Tebrau, District of Johor Bahru containing an area of 522,720 square feet to be owned jointly by