Sabahans holding posters to demand for the return of 40 percent revenue outside the Court of Appeals on Thursday.
KOTA KINABALU (May 16): The Sabah Law Society (SLS) submitted at the Court of Appeal here today that its judicial review has justiciable reason to be heard at the lower court by questioning the 40 percent entitlement rights to Sabah had not been reviewed for 48 years since 1974.
SLS was granted a leave for judicial review on the 40 percent entitlement rights to Sabah by a High Court here on November 11, 2022.
Counsel Dr David Fung, who acted for SLS, explained before a three-member panel chaired by Justice Datuk Ravinthran N. Paramaguru, who sat together with Justices Dato’ Mohd Nazlan Mohd Ghazali and Dato’ Dr Choo Kah Sing, that there are merits in hearing their judicial review as both the federal and state governments failed their constitutional duty to hold a second review before 1974.
“They then held it 48 years later.
“Article 112D of the Federal Constitution says review, what happened within 48 years?” the counsel questioned.
He further pointed out that “It is not a justiciable issue?”
He explained that if there is no negotiation, money goes to people? The government came and changed.
“Federal and state governments jointly breach duty and neglect primary duty to pay 40 percent,” the counsel said.
Fung further submitted that the constitutional duty to pay is imposed by the Federal Constitution upon the Federation of Malaysia and this duty contained in Clause (1) Article 112C and Section 2 of Part IV in the Tenth Schedule.
He explained that Section 2 of Part IV in the Tenth Schedule of the Federal Constitution describes the special grant to the state of Sabah as a grant of amount equal in each year to two-fifths of the amount which the net revenue derived by the Federation from Sabah exceeds the net revenue which would have been so derived in the year 1963.
“Net revenue means ‘the revenue which accrues to the Federation, less the amounts received by the state in respect of assignment of that revenue’. The special grant, being two-fifths of the amount, is commonly referred to as Sabah’s 40 percent entitlement.
“Since the Federation’s duty to pay is subject to a mandated first review in 1969 and a mandated second review not later than 1974 to be held and carried out between the federal and state governments, in the event they are both jointly under duty to do so,” the counsel explained.
However, he pointed out that the Review Order 2022 disclosed that the decision made following the Article 112D review held on February 14, 2022 instead of the mandated time of not later than 1974.
“Wholly omitted providing for payment of the 40 percent entitlement annually for the period between 1974 and 2021, 48 years, the Lost Years.”
He said that “Then, not having held the review in or before the end of 1974, the federal government wholly failed to remedy Sabah’s 40 percent entitlement for the annual payments for the period from 1974 to 2021 in its decision, action and omission under the Review Order 2022, this was for period of 48 years”.
The counsel also submitted that SLS has satisfied the ‘adversely affected’ person test to establish threshold locus standi to bring the judicial review for the interest of the public for the relief applied in a matter of construction of duties imposed in the Federal Constitution in which the court possesses authority to determine and redress.
SLS was replying to points submitted by a senior federal counsel, who acted for the federal government in an appeal filed by the federal government to quash the leave for judicial review granted to SLS.
Earlier, Senior Federal Counsel Ahmad Hanir Hambaly @ Arwi raised two points for their appeal namely, SLS has no locus standi to apply for judicial review and the special grant is non-justiciable.
Ahmad Hanir argued that SLS has no locus to challenge the special grant review, reason being SLS has neither a sufficient personal interest over the special grant nor that this application a public interest litigation.
He further submitted that 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.
Ahmad Hanir also said that if both the governments are unable to reach agreement of the special grant, the proper forum is referred before an independent assessor not before this court.
After hearing submissions from parties, the court fixed May 24 for case management and decision date on the appeal was adjourned to a date to be fixed.
In their judicial review, SLS had named the government of the federation of Malaysia and the state government of Sabah as the first and second respondents respectively.
SLS sought from court 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.
SLS also sought from court a declaration that 40 percent 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.
Apart from that, SLS further sought from court a declaration that the failure to pay the 40 percent 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 sought 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 percent 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.
Lastly, SLS is also seeking an order that the first respondent pays the entitlement as determined under paragraph 3 (a) above to the second respondent or as constitutional damages for breach of Article 13 of the Federal Constitution or both.
SLS was also represented by counsel Jeyan Marimuttu and Janice Junie Lim.
Senior Federal Counsel Shamsul Bolhassan, Federal Counsel Krishna Priya A/P Veenagopal @ Venugopal and Fazriel Fardiansyah Abdul Kadir also acted for the federal government.
Counsel Datuk Tengku Fuad Ahmad and Wilson Chang Khai Sim acted as intervener for the state government of Sabah.