KUALA LUMPUR: The Sessions Court on Thursday (Aug 6) ordered businessman Datuk Seri Adenan Abu, better known as "Datuk Red", his company and another individual to pay RM1.57mil to 17 land buyers in a civil lawsuit over the sale of land in Sungai Semungkis, Hulu Langat, Selangor.
Judge Siti Fatimah Talib made the ruling after allowing the suit filed by 12 men and five women against Adenan, his company ADN Properties Sdn Bhd and Hasmy Abu Hassan, the landowner.
The court ordered the three defendants, jointly and severally, to pay RM1.4mil, plus RM170,000 in exemplary damages payable by ADN Properties and Adenan.
In her judgment, Siti Fatimah said ADN Properties had entered into a master sale and purchase agreement with Hasmy to acquire the land for RM1.8mil. However, the title to the land was never transferred to the company, and the master purchase price was not fully settled.
"Based on the plaintiffs' evidence, the court finds that Adenan was the true controller of operations in the company's transactions. ADN Properties, through its agents and Adenan, portrayed the company as the landowner with the actual rights to sell specific lots," she said.
The judge found that fraud against the plaintiffs occurred through a series of representations and concealment of material facts.
"The material facts that were not fully disclosed are that ADN was not the registered owner and the master purchase price had not been settled. The inheritance and land approval matters had also not been finalised. In fact, ADN was not even in a position to guarantee the transfer of specific lots," she said.
Siti Fatimah further found that ADN Properties had committed a fundamental breach. The company had received the full purchase price but failed to deliver the rights and promises made, and also failed to refund the money it had received from the buyers.
"This breach goes to the very root of the contract, as the plaintiffs were entitled to terminate the transaction and recover the purchase price," she ruled.
She said the court also found that Adenan was not held liable merely because he was a director. Rather, he was an active participant who controlled ADN Properties, signed the sale and purchase agreements, knew that the title and master payment were not finalised, continued to sell the lots, and failed to return the money received from the plaintiffs.
"The representation that ADN Properties was capable of delivering the lots was made recklessly. Whether that representation was true or not, fraud and the tort of deceit have been proven against it," she said.
All 17 plaintiffs, who filed the suit in 2019, claimed that they had signed sale and purchase agreements and paid the purchase price for the lots.
The plaintiffs alleged that promotional materials portrayed the land as suitable for residential development, with facilities including a surau, school and recreational centre.
They were also told that the agricultural land could be rezoned for development at an extra RM1.50 per square foot.
According to the plaintiffs, a land search revealed that the land was still registered in the original owner's name and had never been transferred to ADN Properties.
They claimed that the actions of the parties involved were not merely a breach of contract, but amounted to misrepresentation, fraud and conspiracy, which caused them to pay for land that could not be transferred as promised.
All the plaintiffs were represented by lawyer Bhavanash Sharma. - Bernama
