The Federal Court affirmed that public interest litigation allows broader locus standi, emphasizing the necessity for substantive hearings over threshold leave applications in constitutional matters.

Nallini Pathmanathan FCJ:

[1] This is an application for leave to appeal under s 96 of the Courts of Judicature Act 1964 ('CJA') by the Attorney-General of Malaysia in respect of a decision handed down by the Court of Appeal on 18 June 2024.

[2] The Court of Appeal unanimously affirmed the High Court 's decision granting leave for judicial review to the Sabah Law Society ("SLS") against the Government of Malaysia and the State Government of Sabah in respect of the Special Grant provided for Sabah under the provisions of the Federal Constitution

[3] The State Government of Sabah is no longer a party to these proceedings having withdrawn from the same, prior to the hearing before the Court of Appeal.

[4] In this application, the questions for leave under s 96 CJA that fall for consideration may be divided into three categories:

(a) Whether the respondent's present application for judicial review is within the Federal Court 's exclusive jurisdiction under art 128(1)(b) (Leave Questions 2 and 3);

(b) Does the Sabah Law Society ('SLS') possess locus standi to bring the present judicial review? (Leave Question 4); and

(c) Is the present matter justiciable? (Leave Question 1).

[5] Before we deal with the leave questions, these are the salient background facts:

(a) The SLS is an entity established under the Advocates Ordinance (Sabah) (Cap 2). It is applying for judicial review in respect of the Special Grant provided for Sabah under art 112C and s 2 of Part IV of the Tenth Schedule of the Federal Constitution.¹ This Special Grant is a matter that was agreed to by Sabah, Sarawak and Singapore on the formation of Malaysia when the Malaysia Agreement 1963 was entered into between the Federation of Malaya and the United Kingdom. This Special Grant is subject to review under art 112D.² The respondent in the judicial review application is the Federal Government;

(b) In essence art 112C provides that the State of Sabah is entitled to a grant equivalent to 40% of the amount by which the net revenue derived by the Federation from Sabah exceeds the net revenue which would have been derived in 1963 subject to s 2(1)(a) and (b). We shall refer to that as the Special Grant;

(c) In the present judicial review application, the subject matter of relevance is art 112D particularly cls (3) and (4) (see footnote 2). These clauses provide that the Special Grant to Sabah (and Sarawak) are subject to review at specified times by the Government of the Federation and the Government of Sabah;

(d) SLS' grievance is that a second review of the Special Grant was not made by the end of 1974 as provided in cl (4). Instead, on 20 April 2022 the Federal Government published an Order in the gazette under the authority of art 112D. This Review Order 2022 reads as follows:

"2. For a period of five years with effect from 1 January 2022, the Government of the Federation shall make to the State of Sabah, in respect of the financial year 2022, 2023, 2024, 2025 and 2026, grants in the amount of RM125.6 million, RM129.7 million, RM133.8 million, RM138.1 million and RM142.6 million respectively.

3. The Sabah Special Grant (First Review) Order 1970 [PU(A) 328/1970] is revoked."

(e) As submitted by SLS, after having failed to conduct a review by the end of 1974, the Federation allegedly "failed to remedy Sabah's 40% entitlement for the annual payments for the period from 1974 to 2021 in its decision, action and omission under the Review Order 2022". This is referred to by SLS as the "Lost Years";

(f) The position of SLS is that this failure to review amounts to a breach of the Federal Government's constitutional duty towards Sabah;

(g) They further contend that in the absence of any further reviews from 1974 until the present, the 40% or Special Grant is applicable until such time as a further review is conducted and implemented;

(h) In response, the Permanent Secretary of the Ministry of Finance of Sabah responded to the above averments as follows:

"37. ..... I am advised and av