Termination of a sale agreement is valid if based on breach of fundamental terms; fraud nullifies indefeasible titles under land law.

[1] These two relatively complex appeals arose from two consolidated suits in the Kuala Lumpur High Court viz Civil Suit S2-(S5)-21-182-2001 ("Civil Suit S2") and Civil Suit S3-22-1150-2001 ("Civil Suit S3"). They involve substantially the same parties, and the same properties viz three parcels of agricultural land held under Geran No 9743 Lot 2675, Geran No 9744 Lot 2676; and Geran No 9745 Lot 2677, in the mukim of Kertih, district of Kemaman, Terengganu (collectively "the land").

[2] In Civil Suit S2, the plaintiff is Koperasi Polis DiRaja Malaysia Bhd ("KPDRM"). After a full trial, as against the first defendant Koperasi Mahadaya Berhad ("Mahadaya"), the High Court made the following orders:

(1) Declaration:

(a) that the sale and purchase agreement executed between KPDRM and Mahadaya on 21 December 2000 ("SPA 1") is terminated, null and void;

(b) that KPDRM is entitled to forfeit RM200,000 from the deposit and part payment of RM1 million;

(c) that KPDRM is at all times the rightful owner of the Land;

(d) that any dealing by any party using SPA 1, Transfer Form and Title Deeds (collectively "the Transfer Documents") after the date of SPA 1 is null and void;

(e) that all entries of transfers of title and memorial effected by any party using the Transfer Documents after the date of SPA 1 are null and void;

(2) Injunction:

(a) that Mahadaya re-transfer the Land to KPDRM;

(b) that Mahadaya return the Transfer Documents to KPDRM within 14 days of service of this order;

(c) restraining Mahadaya from using the Transfer Documents to deal with any person whatsoever;

(3) An order that Mahadaya deliver vacant possession of the Land to KPDRM; and

(4) Costs.

[3] Meanwhile, the High Court dismissed Mahadaya's counterclaim for:

(1) A declaration that Mahadaya is the rightful registered owner of the Land;

(2) An injunction restraining KPDRM from interfering with the affairs, management and administration of Mahadaya;

(3) Specific performance of SPA 1;

(4) General damages; and

(5) Costs.

[4] As against the second defendant, Reinco Properties Sdn Bhd ("Reinco"), KPDRM obtained the following orders:

(1) Declaration:

(a) that the sale and purchase agreement executed between Mahadaya and Reinco ("SPA 2") is null and void;

(b) that KPDRM is at all material times the rightful owner of the Land;

(c) that any dealing by any party using the Transfer Documents after the date of SPA 2 is null and void;

(d) that all entries of transfers of title and memorial by any party after the date of SPA 2 is null and void;

(2) Injunction:

(a) that Reinco return forthwith the Transfer Documents to KPDRM;

(b) restraining Reinco from dealing with any person by using the Transfer Documents and SPA 2;

(3) An order that Reinco deliver vacant possession of the Land to KPDRM; and

(4) Costs.

[5] Civil Suit S3 was filed by Reinco against Mahadaya and KPDRM, based on the joint venture agreement ("the JVA") and Supplemental Agreement ("the SA") entered into between Mahadaya and Reinco. Reinco claims, inter alia, beneficial ownership of the Land on the ground that, pursuant to the JVA, it had provided RM1.8 million to Mahadaya to purchase the Land. In addition, Reinco sought the following reliefs:

(1) Declaration:

(a) that KPDRM's purported termination of SPA 1 is null and void;

(b) that KPDRM's remedy is in personam against Mahadaya, or Mahadaya's solicitors who gave their undertakings, for the balance purchase price;

(c) that by its letter dated 1 June 2001, Mahadaya was in default by not performing the JVA and the SA, but purporting to terminate the same;

(2) A vesting order pursuant to cl 2 of the SA to vest the Land from Mahadaya to Reinco; and a further order directing the Registrar of Titles Terengganu to give effect to the prayer herein;

(3) Damages for breach of contract to be assessed by the Senior Assistant Registrar;

(4) Liquidated damages in the sum of RM800,000.00 with interest at 8% pa from 21 December 2000 to the da