KOTA KINABALU: The Court of Appeal today reserved its ruling on an appeal against a decision to allow a judicial review of the state's entitlement to 40 per cent of revenue.
Court of Appeal judges Datuk Ravinthran N. Paramaguru, Datuk Mohd Nazlan Mohd Ghazali and Datuk Dr Choo Kah Sing made a unanimous decision after hearing all the parties' arguments.
"We don't want to rush in this issue," said Ravinthran.
The court fixed May 24 for case management and would decide later on when to deliver its decision.
On Nov 11, 2022, the High Court here granted leave to the Sabah Law Society (SLS) to seek a judicial review of the federal government's duty to pay to Sabah the special grant amounting to 40 per cent of revenue derived from the state.The Attorney-General's Chambers (A-GC) appealed against the decision.
The A-GC also obtained a stay order on proceedings in the High Court.
The issue revolves around SLS' contention that Sabah has a right to that percentage of federal revenue
SLS had named the federal government and Sabah government as the first and second respondents, respectively, in its leave application.
In June 2022, SLS filed a leave application for a judicial review naming the federal government and Sabah state government as the first and second respondents, respectively.
Earlier, Senior Federal Counsel (SFC) Ahmad Hanir Hambaly @ Arwi who acted for the appellant submitted that the leave for judicial review should not be granted because the respondent has no locus standi to apply for judicial review and the decision on the Special Grant is non-justiciable.
On locus standi, the appellant said the subject matter for the substantive judicial review would be a matter exclusively within the domain of the federal and state governments.
"The ones who will be affected are these two parties. This is why we say that the respondent does not have the locus standi to initiate a judicial review."
On the justiciability of the matter, Ahmad pointed this is a non-justiciable matter because the decision on the amount of the special grants reviewed under Article 112D of the Federal Constitution is an executive action by both governments, taking into account fiscal and administrative considerations which are exclusively within the domain of the executive authorities.
"The formula and the amount of the special grants were achieved based on negotiations between both governments, taking into account fiscal position of the federal government, financial position of the state government including state revenues, operating and development expenditures as well as socioeconomics development in the state.
"It is humbly submitted that those are policy matters involving financial implications which are not within the knowledge of this court," he explained.
He also submitted that the federal government and Sabah government is unable to reach an agreement on this Special Grant, the proper forum is referred before an independent assessor pursuant to Article 112D(6) of the Federal Constitution, not before this court.
In reply, counsel Dr David Fung who acted for SLS said both the federal and state governments had failed their constitutional duty to hold a second review before 1974. They then held it 48 years later.
" If you don't obey a duty to pay and the moment you have the 2022 review, what about what is omitted?
"Are you saying that this is not justiciable? And you are just negotiating. It is 2024 and we have not remotely seen what 40 per cent is and they are still negotiating. We are not saying that they cannot negotiate. But we are asking what happened to the 48 years?"
On the locus standi, Fung said the courts are the guardians of the constitution.
"If we cannot turn to the courts, where can the people of Sabah turn to? That is why it is a public interest litigation, threshold locus standi has been crossed. People of Sabah who live here are adversely affected."
Meanwhile, the court had granted intervener application made by counsel Datuk Tengku Ahmad Fuad Tengku Ahmad Burhanuddin who acted for the Sabah government.
Fuad said they just filed an intervener and did not appeal because they would like the judicial review to be fully heard on the substantive merits (justiciability) in the High Court which was a key element to the Sabah government being joined to the leave hearing.
On justiciability, Fuad expressed disagreement with the appellant's position as it regards the capacity of the court to consider the challenge of Art 112C and 112D.
"It is our submission that it is a justiciable issue. It is admitted by both sides that no review was done in 1974. A breach of a constitutional duty is a justiciable issue that can be brought before the court."
However, in his submission on locus standi Fuad had indicated that SLS has no locus standi which prompted the court to about the inconsistencies.
"We are not exactly inconsistent. However, we did want the matter to be heard in High Court which is why we did not appeal. Since this is being heard, we must appear as we are affected," explained Fuad.
In their leave application for a judicial review SLS among others is seeking a declaration that the failure of the first respondent to hold the second review in the year 1974 with the second respondent is a breach and contravention of its constitutional duty stipulated under Article 112D, Clauses (1), (3) and (4) of the Federal Constitution.
They also seek a declaration that 40 per cent entitlement remains due and payable by the first Respondent to second respondent for each consecutive financial year for the period from the year 1974 to the year 2021.
They demand a declaration that the failure to pay the 40 per cent entitlement by the first respondent to the second respondent for each consecutive financial year for the period from the year 1974 to the year 2021 is a breach of the fundamental right to property of the second respondent and ultimately of the people of Sabah as enshrined under Article 13 of the Federal Constitution.
Further, they seek an order of mandamus directed to the first respondent to hold another review with the second respondent under the provisions of Article 112D of the Federal Constitution to give effect to payment of the 40 per cent entitlement under Article 112C read with subsection (1) of Section 2 of Part IV of the Tenth Schedule of the Federal Constitution for each consecutive financial year for the period from the year 1974 to the year 2021 within 30 days and to reach a decision within 90 days from the date of this order.
They also seek an order that the first respondent pays the entitlement as determined under paragraph 3 (a) above to the 2nd Respondent or as constitutional damages for breach of Article 13 of the Federal Constitution or both.
The federal government was also represented by SFC Shamsul Bolhassan, Federal Counsel (FC) Krishna Priya Veenagopal @ Venugopal and FC Fazriel Fardiansyah Abdul Kadir.
Fung was together with counsels Jeyan T.M Marimuttu and Janice Junie Lim in representing SLS.
Fuad was together with counsel Wilson Chang.