Tycoon Nicholas Van Hoogstraten was served with a writ alleging fraud by rival landlord Mohammed Raja two months before Mr Raja's murder, a court heard today.

The Old Bailey was told the case would be "extremely costly" for whoever lost.

Mr Raja first began legal action against Hoogstraten in October 1993, the court heard.

There followed a series of claims and counter claims in the civil courts regarding property.

Hoogstraten issued a summons to strike out Mr Raja's actions, citing an "inordinate and inexcusable delay" and "an abuse of rules", the court heard.

But solicitor James Lightfoot said Hoogstraten's actions failed on May 11, 1999, and Mr Raja successfully amended his initial writ to sue Hoogstraten for fraud.

Mr Lightfoot said: "The allegation of fraud takes it several steps further.

"It is not simply breaching an agreement and a duty. It is saying you have done so dishonestly."

Prosecutor David Waters, QC, said the writ made "allegations of fraudulent conspiracy and allegations of forged or bogus transfers and further reference to the results of the fraudulent conspiracy."

Letters between Hoogstraten and Mr Raja earlier in 1999 were read to the court.

Both sides appeared to indicate they wanted to find a settlement and "keep these money grabbers and greedy solicitors out of our way".

The court heard Mr Raja wrote to Hoogstraten in March 1999: "I have great respect for your integrity as you are very sincere and unusually unique.

"That is why you are what you are today."

Hoogstraten replied he was willing to meet Mr Raja to discuss a settlement.

However, Mr Raja's application to sue for fraud still continued.

Hoogstraten, 57, of High Cross Estate, Framfield, denies murder and conspiracy to murder Mr Raja, 62, on July 2, 1999.

David Croke, 59, of Bolney Road, Moulsecoomb, Brighton, and Robert Knapp, 53, from County Limerick, deny murder.

The trial continues.