PUTRAJAYA (March 31): The Court of Appeal (COA) on Tuesday has deferred its decision to Monday (April 6) over the federal government’s bid to pause the review for the calculation of Sabah’s constitutionally-promised revenue entitlement, which has not been done since 1974.
The 180-day deadline given by the Kota Kinabalu (KK) High Court following its decision on Oct 17 last year, ends on April 15.
Since the Oct 17 decision, there have been four meetings between the federal government and the Sabah government.
The three-member bench, led by COA judge Datuk Mohamed Zaini Mazlan, along with Datuk Ismail Brahim and K Muniandy, unanimously agreed to mull over this matter more, so that they are able to “chew over the issues” in this application and deliver their decision on Monday.
The proceedings were done online, with the Sabah Law Society (SLS) and the Sabah government as the respondents.
Senior Federal Counsel Ahmad Hanir Hambaly@Arwi for the federal government, who is the appellant in the matter, told the bench that the government is not appealing Sabah’s entitlement to the 40% revenue, nor the requirement to hold the review; but it is seeking the stay in order to work out the mechanics in calculating the review.
“This requires a realistic approach as to how the order that has been granted by the Kota Kinabalu High Court, to review, made under Article 112D of the Federal Constitution, [is to be done, and] to work out the mechanics of the calculation.
“The review has to also look at the financial capability of the federal government during the 1974 to 2021 period as stipulated. The matter involves voluminous documents and calculation by the Finance Ministry, and [because of] that, we cannot be adhering [or] complying by the timeline set by the High Court,” he added.
Seeking six-month stay
Senior federal counsel Ahmad Hanir, appearing with federal counsels Saffiyah Omar, Mohammad Solehheen Mohammad Zaki and Nur Atirah Aiman Rahim, in the stay application made under Section 44 of the Courts of Judicature Act 1964 (CJA), also argued that if the stay is not granted, it would result in the federal government’s appeal becoming nugatory.
He said the federal government is seeking a stay for roughly six months until its appeal proper could be heard sometime in October, if parties are agreeable to it.
Ahmad Hanir said the federal government has a problem with the KK High Court’s order of having to reach an agreement within 180 days with the Sabah government over the ongoing review process.
Furthermore, Ahmad Hanir added that there is a mandamus order to compel or direct the federal government to hold the review under Article 112D of the Federal Constitution (FC), to give effect to the Federation making the 40% entitlement to Sabah under Article 112C of the Tenth Schedule of the FC for the period from 1974 to 2021, within 90 days of reaching an agreement within the 180 days from the date of the order.
“This means that after 180 days, the federal government is required to pay Sabah within 90 days, where the mode of calculation has yet to be finalised,” he added.
Sabah Law Society and Sabah government opposes
SLS, represented by Dr David Fung Yin Kee of Messrs Alex Pang & Co — who is one of the applicants at the High Court — along with Jeyan TM Marimuttu, Janice Junie Lim, and Grace Liew Yung Enn, opposed the stay sought by the federal government, arguing that the matter should have been applied at the KK High Court first.
Fung said that although they are not a party to the ongoing negotiations between the federal and Sabah government, there had already been four meetings from the court decision, and that the federal government was wrong to invoke Section 44 of the CJA without applying at the KK High Court first for a stay as there is time until April 15.
“The Sabah Law Society has applied for the review to be done within 90 days, and the judge has considered on her own to extend it to 180 days without us submitting. If the federal government needs to extend it, it should be done at the High Court, and not here,” he added.
Reiterating the same, Sabah Attorney General (AG) Datuk Brenndon Keith Soh, who appeared with Sabah senior counsel Mohd Saifurrazee Mohamed and Calvin Joy Ensui, also opposed the stay application, saying that the federal government should have applied to the KK High Court, and if a stay is not granted, it does not render the federal government’s appeal nugatory.
Citing a case, Brenndon said the federal government may apply for a time extension when necessary, after the expiration of that period, and that should be done at the High Court and not the appellate court.
“Since they do not dispute a review to take place, it is unnecessary to apply for a stay, as the meeting towards an agreement is ongoing,” the Sabah AG added.
The KK decision
Last October, KK High Court judge Celestine Stuel Galid had ordered Putrajaya and the Sabah government to hold a mandatory review of the special grant of 40% return on state revenue that Sabah is entitled to, that has been pending since 1974.
Galid also ruled that the federal government’s issuance of a special grant to the Sabah government, and its method of deriving the sum to be granted, was unlawful.
This came about after she allowed the judicial review by the SLS, which was seeking to compel the federal government to hold a review with the Sabah government, so as to make good the constitutional promise made at the formation of Malaysia in 1963, that grants Sabah a 40% share of the net federal revenue collected in the state above the 1963 baseline amount, for each consecutive year from 1974 to 2021.
The SLS is further seeking an order for the federal government to pay the entitlement as determined.
Article 112D of the Federal Constitution stipulates for a periodic review of the special grants and assignments of revenue to the states of Sabah and Sarawak, as outlined in Article 112C, which the SLS claims has not been done since 1974.