Kerajaan Negeri Kedah Darul Aman v Ng AI Wah (K-01(A)-435-07/2024)

LEE YEE PING (NO. K/P: 670902-08-5318) ...RESPONDEN-RESPONDEN (Dalam perkara mengenai Guaman Sivil No: KA-25-1-02/2023 dalam Mahkamah Tinggi Malaya di Alor Setar)

Lee Bak Chui (No. K/P:480530-02-5009)

STM Lottery Sdn Bhd (NO. PENDAFTARAN:196901000090(8420-D)

Lee Yee Ping (No. K/P:670902-08-5318) ... Pemohon-Pemohon

Kerajaan Negeri Kedah Darul Aman

Menteri Besar Kedah, YAB Dato' Seri Haji Muhammad Sanusi Bin Md Nor

Majlis Daerah Baling

Yang Dipertua Majlis Daerah Baling ...Responden-Responden DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANGKUASA RAYUAN)

CHEW SEE LEAN (NO. K/P:830309-14-5252) ...RESPONDEN-RESPONDEN (Dalam Perkara mengenai Guaman Sivil No: KA-25-3-03/2023 Dalam Mahkamah Tinggi Malaya di Alor Setar)

Tan Phick Eng (No. K/P: 571218-07-5355)

ENE (Penang) Sdn. Bhd (No. Syarikat: 617602-K)

Chew See Lean (No. K/P: 830309-14-5252) ...Pemohon-Pemohon

Kerajaan Negeri Kedah Darul Aman

Menteri Besar Kedah, YAB Dato' Seri Haji Muhammad Sanusi Bin Md Nor

Majlis Bandaraya Alor Setar

Datuk Bandar Majlis Bandaraya Alor Setar ...Responden-Responden

CHERYL TAN BEE KHENG NO. K/P:950504-35-5016) (Dalam Perkara mengenai Guaman Sivil No: KA-25-4-03/2023 Dalam Mahkamah Tinggi Malaya di Alor Setar)

Teoh Cheak Fang (No. K/P:641224-02-5654)

Everday Dollars Sdn Bhd (No. Pendaftaran: 201101042710 (970830-U)

STM Lottery Sdn Bhd (No Pendaftaran:196901000090) (8420-D)

Cheryl Tan Bee Kheng No. K/P: 950504-35-5016) ... Pemohon-Pemohon

Kerajaan Negeri Kedah Darul Aman

Menteri Besar Kedah, YAB Dato' Seri Haji Muhammad Sanusi Bin Md Nor

Majlis Bandaraya Alor Setar

Datuk Bandar Majlis Bandaraya Alor Setar ...Responden-Responden

KONG KIEN YOONG (NO. K/P: 800415-14-5785) (Dalam Perkara mengenai Guaman Civil No: KA-25-5-03/2023 dalam Mahkamah Tinggi Malaya di Alor Setar)

Ong Khim Hin (No. K/P: 780823-07-5477)

Lew Ewe Chun (No. K/P: 831214-02-5279)

Ene (Penang) Sdn Bhd (No. Pendafataran: 20030105182 (617602-K)

Tang Wei Hoong (No. K/P: 770322-14-5669)

Kong Kien Yoong (No. K/P: 800415-14-5785) ... Pemohon-Pemohon

Kerajaan Negeri Kedah Darul Aman

Menteri Besar Kedah, YAB Dato' Seri Haji Muhammad Sanusi Bin Md Nor

Majlis Bandaraya Alor Setar

Datuk Bandar Majlis Bandaraya Alor Setar ...Responden-Responden

MENTERI BESAR KEDAH, YAB DATO'

FONG WAI SIM (NO. K/P: 660111-08-6382) ...RESPONDEN-RESPONDEN (Dalam Perkara mengenai Guaman Sivil No: KA-25-11-04/2023 dalam Mahkamah Tinggi Malaya di Alor Setar)

Ng Ai Wah (No. K/P: 600917-02-5357)

Vishnu Shakthi A/L Poopala Chelvam (No. K/P: 730218-14-5291)

Tiara Tiers (M) Sdn Bhd (No. Syarikat: 497197-X)

Tiew Chooi Lye (No. K/P:580519-02-5065)

Swift Wizard Systems Sdn Bhd (No. Syarikat: 494404-V)

Brahma Shakyhi A/L M. Poopala Chelvam (No. K/P: 750518-10-5417)

Golden Instincts (M) Sdn Bhd (No. Syarikat: 477749-A)

STM Lottery Sdn Bhd (Dulu Dikenali Sebagai Sports Toto Malaysia Sdn Bhd) (No. Syarikat: 8420-D)

Tan Soo Ling (No. K/P: 710113-02-5068)

Khi Moh Yan (No. K/P:960523-08-5858)

Lee Yee Ping (No. K/P:670902-08-5318)

Fong Wai Sim (No. K/P: 660111-08-6382) ...Pemohon-Pemohon

Kerajaan Negeri Kedah Darul Aman

Menteri Besar Kedah, Yab Dato' Seri Haji Muhammad Sanusi Bin Md Nor

Majlis Perbandaran Sungai Petani

Yang Dipertua Majlis Perbandaran Sungai Petani ...Responden-Responden

KONG KIEN YOONG (NO. K/P:800415-14-5785) (Dalam Perkara mengenai Guaman Sivil No: KA-25-16-05/2023 dalam Mahkamah Tinggi Malaya di Alor Setar)

Khor Sek Kean (No. K/P: 750918-08-5603)

ENE Penang Sdn Bhd (No. Syarikat: 617602-K)

Kong Kien Yoong (No. K/P: 800415-14-5785) ...Pemohon-Pemohon

Kerajaan Negeri Kedah Darul Aman

Menteri Besar Kedah, Yab Dato' Seri Haji Muhammad Sanusi Bin Md Nor

Majlis Perbandaran Sungai Petani

Yang Dipertua Majlis Perbandaran Sungai Petani ...Responden-Responden CORAM HAJJAH AZIZAH BINTI HAJI NAWAWI, JCA FAIZAH BINTI JAMALUDIN, JCA LIM HOCK LENG, JCA

There were 6 related appeals before us which were heard together. These appeals were brought by the State Government of Kedah ("the 1 $ ^{st} $ Appellant") and the Right Honourable Chief Minister of the State of Kedah ("the 2 $ ^{nd} $ Appellant"), against the decision of the learned High Court Judge ("the learned HCJ") granting judicial review - on 20 June 2024 - to the Respondents who are pool betting agents, pool betting companies or principal officers of pool betting companies registered under the Pool Betting Act 1967.

The salient facts are undisputed.

The 1 $ ^{st} $ Appellant, comprising the 2 $ ^{nd} $ Appellant and the Kedah State Executive Council ("the EXCO"), had decided to stop renewing and issuing business premises licences for pool betting business activities.

The decision was announced at a press conference on 14 November 2021, following the tabling of the State of Kedah's budget for 2022.

It was said to be made for the welfare of the people, taking into consideration the religion of Islam and the social ills of gambling.

The decision was, nonetheless, not implemented immediately, and the Respondents were able to renew their business premises licences in 2022.

From 16 November 2022 to 3 January 2023, the Municipal Councils of Alor Setar and Sungai Petani as well as the District Council of Baling issued a series of letters to the Respondents in which reference was made to an EXCO meeting on 8 December 2021 where there was consensus that (i) the Malaysia Ministry of Finance ("MOF") should no longer consider renewing gambling licences in the State of Kedah for 2023, and (ii) the local authorities and police would take strict enforcement action if any licence holder were to continue operating after 31 December 2022.

In spite of the letters by these local authorities which were prompted by the decision made at the said EXCO meeting on 8 December 2021, the MOF renewed the pool betting licences for 2023, for such of the Respondents as were pool betting companies which, in turn, allowed them to appoint principal officers or agents who are then individually licensed to carry out the pool betting business. Both types of licences require the display of a sign stating, inter alia, "JUDI ADALAH HARAM DI SISI AGAMA ISLAM."

The said local authorities, however, refused to renew the business premises licences which they had previously done so on a yearly basis.

While some of these licences had a validity period till 31 December 2022, there were others that would only expire at various dates in the course of 2023.

To recapitulate, the local authorities in Alor Setar, Baling, and Sungai Petani had made it clear by their respective letters that strict enforcement action would be taken if any licence holder were to continue operating after 31 December 2022.

As a result, starting from January 2023, the Respondents could not operate their pool betting business at the business premises designated in the pool betting licences.

It was thus the Applicants/Respondents took out applications for judicial review for, inter alia, declarations that the local authorities and their heads had acted illegally, irrationally and in an unconstitutional manner or ultra vires the Federal Constitution in issuing those letters from 16 November 2022 to 3 January 2023; further and/or in the alternative, declarations that the $ ^{1st} $ and $ ^{2nd} $ Appellants had acted illegally, irrationally and in an unconstitutional manner or ultra vires the Federal Constitution in directing the local authorities and their heads to follow the decision of the Kedah Exco on 8 December 2021; and certain orders of Certiorari and Mandamus. The Respondents also prayed for damages.

The Appellants contended that their collective decision was a policy matter which rendered it non-justiciable. With the tenet of separation of powers in mind, it was also contended that the judiciary ought not to interfere with the executive's role in policymaking.

In so contending, the Appellants referred to a number of authorities including R Rama Chandran v. Industrial Court of Malaysia & Anor (1997] 1 CLJ 147, where the Edgar Joseph Jr FCJ, in delivering his majority decision, observed that "where policy considerations are involved in administrative decisions and Courts do not possess knowledge of the policy considerations which underlie such decisions, Courts ought not to review the reasoning of the administrative body, with a view to substituting their own opinion on the basis of what they consider to be fair and reasonable on the merits, for to do so would amount to a usurpation of power on the part of the Courts."

Reference was also made to Dr Michael Jeyakumar Devaraj v Peguam Negara Malaysia [2013] 2 CLJ 1009, where the Appellant, the Member of Parliament for the Sungai Siput constituency, had requested the Director of the Perak State Development Office for funds for his constituency from the Special Constituency Allocation. The Appellant did not get the response he wanted, and applied for judicial review to quash the decision. Leave had been granted by the High Court but was set aside by the Court of Appeal, whose decision was affirmed by the Federal Court.

In that case, Raus Sharif PCA (as His Lordship then was), in delivering the judgment of the Federal Court, held: "Courts must be wary of unduly extending its judicial arms to policy matters which are exclusively within the domain of the executive. Unwarranted usurpation and transgression by the judiciary into the realm of the executive and vice versa will bring about disrepute to our system of government which upholds the separation of powers between the three main components vis a vis the executive, the legislature and the judiciary."

In response to the Appellants' arguments, the Respondents pointed out that the issue of non-justiciability was raised at the leave stage but the High Court nonetheless granted leave. There was no appeal against the decision granting leave. As such, the Respondents argued, relying on Ng Yee Hong v Disciplinary Committee, Malaysian Institute of Accountants & Anor [2022] MLJU 1273, that the dispute is justiciable and may be heard on the merits.

In any event, the principle that policy decisions are not amenable to judicial review is subject to exceptions, and dependent on the facts of each case.

Significantly, the material facts in the authorities cited by the learned SFC did not concern a transgression of the Federal Government's exclusive jurisdiction over "betting and lotteries", as prescribed by item 4(1) of the Federal List (List I)/Ninth Schedule of the Federal Constitution.

The material facts in fact fall within the exceptions envisaged in Dr Michael Jeyakumar Devaraj (supra), as may be garnered from the following passage: [21] Of course, in appropriate cases the courts as the custodian of law and justice must not remain idle. Where the policy or action of the executive is inconsistent with the Constitution and the law or in any manner arbitrary, irrational or there are elements of mala fides and abuse of power, the court is duty bound to interfere. Whether or not the court should interfere clearly depends on the facts and circumstances of each case."

If at all further authority is required, the Supreme Court, in Minister of Labour Malaysia v Lie Seng Fatt [1990] 2 MLJ 9, made it clear that the Courts can subject an executive act to judicial review where the act is in contravention of the law.

While the issuance of trading or business premises licences is an incidental part of local government which falls within item 4 of the State List (List II)/Ninth Schedule of the Federal Constitution, it is the Pool Betting Act 1967 - applicable throughout Malaysia - which confers on the Minister of Finance the authority to issue licences to regulate the pool betting business under the oversight of the Federal Government.

Article 74 of the Federal Constitution stipulates that it is Parliament that makes laws on subjects within the Federal List (and the Concurrent List which is not in issue or of relevance in the appeals before us), while Article 80 demarcates the executive authority of the Federation and a State, according to matters with respect to which Parliament and the State Legislature may make laws.

Any attempt by a State to prohibit pool betting activities and business-which is within the exclusive jurisdiction of the Federal Government - through the non-renewal of business premises licences would be unconstitutional or ultra vires the Federal Constitution.

In this regard, support may be drawn from Nik Elin Zurina bt Nik Abdul Rashid & Anor v. Kerajaan Negeri Kelantan [2024] 2 MLJ 150. There, the Federal Court held: [200] As submitted by the petitioners, betting and lotteries is a subject-matter under the Federal List which is clearly spelt out by item 4(l) of the Federal List which states: 4. Civil and criminal law and procedure and the administration of justice, including -... (l) betting and lotteries. [201] We take the view that 'betting and lotteries' can clearly and reasonably be taken to include gambling. The organisation of gaming houses and the regulation of betting and lotteries, as well as the creation of offences and their punishments are within the jurisdiction of Parliament. We find that s 37(1)(b) purports to deal with a matter that is included in item 4(l) of the Federal List which should be read together with the general header of item 4 on 'criminal law'. The subject matter of s 37(1)(b) is thus caught by the preclusion clause. [202] We accordingly hold that s 37(1)(b) is unconstitutional on the ground that the respondent did not have the power to make it."

I am mindful that, in the instant case, it is not the enactment of a State law which directly clashes with a law enacted by Parliament.

Rather, it is the purported exercise of a State law or executive act of the State authorities which encroaches on a Federal law, and clashes with it.

In respect of the recent decision of the Federal Court in Dato' Ting Ching Lee v Ting Siu Hua [2025] 4 CLJ 1 that gambling activities are against public policy, that case concerned the recovery of monies related to gambling debts and the application of section 26 of the Civil Law Act 1956 and sections 24 and 31 of the Contracts Act 1950.

The salient facts and applicable laws in that case are markedly different.

By contrast, the issues here turn on the exercise of a State law in relation to the Pool Betting Act 1967, and the exercise of the Federal Minister's duties and responsibilities under that Federal law; and how all that is to be viewed subject to the supreme law in Malaysia, the Federal Constitution.

The Appellants' contention that the EXCO decision and the ensuing letters by the local authorities were neither illegal or irrational - because they only dealt with the termination or nonrenewal of the business premises licences, and were matters within the purview of the State Government of Kedah - ought to be given short shrift.

Section 107(3) of the Local Government Act 1976 which provides that a local authority may at its discretion refuse to grant or renew any licence without assigning any reason must be read in the light of the EXCO decision and the ensuing impugned letters which were aimed at, as concisely summarised by the learned HCJ, "the banning of pool betting in the State of Kedah altogether."

Indeed, in his affidavit-in-opposition, the 2nd Appellant expressly averred that the object of the whole exercise or decision was to ban gambling activities ("melarang aktiviti perjudian").

The learned HCJ held that undertaking the exercise of harmonious construction, the local authorities could exercise rights over the issuance of business premises licences, "but not to the extent of banning betting and lotteries. Otherwise, it would be including matter to override or render meaningless the entry in item 4(1) of the Federal List."

While the learned High Court Judge did not specifically mention Article 81 of the Federal Constitution, it is abundantly clear that the impugned decision violates Article 81 which provides that every State shall exercise its executive authority so as to ensure compliance with all applicable federal laws, and so as not to impede or prejudice the exercise of the executive authority of the Federation.

In substance, the termination and non-renewal of the business premises licences were clearly the means to an end, which had the effect of usurping the constitutional right and duty of the Minister of Finance to regulate the business of pool betting throughout Malaysia.

It was an exercise of State executive authority to implement a blanket ban on gambling including pool betting business which falls within the regulatory ambit of the Federal Government.

For the reasons given, the $ 1^{\mathrm{st}} $ Respondent's decision to terminate or cease the renewal of business premise licences for pool betting businesses is irrational, inconsistent with and ultra vires the Federal Constitution.

The learned HCJ could not be faulted for granting declaratory reliefs as against the $ 1^{\mathrm{st}} $ Appellant, and an Order for Certiorari to quash the decision of the $ 1^{\mathrm{st}} $ Appellant.

The learned HCJ also granted the prayer for damages to be assessed against the $ 1^{\mathrm{st}} $ Respondent by the Deputy/Senior Assistant Registrar. The award of damages cannot be faulted as it is in line with Order 53, rule 5, of the Rules of Court 2012. The Respondents had included a claim for damages in their statement in support of their applications for leave, and they were in a position for damages to be awarded at that point in time. There were abrupt closures of businesses which had been running for years. There would have been outlay of capital expenditure, and so on.

The learned HCJ did not grant any prayers against the $ 2^{\mathrm{nd}} $ Appellant, whose appeal is thus of no utility and in vain. No orders were granted against the local authorities and their respective heads who were named as Respondents in the Judicial Review proceedings, and there were accordingly no appeals by these Respondents.

On a related note, there was no cross-appeal by the Respondents in regard to the dismissal of their contention that "there is unfair discrimination against the non-Muslims in the State of Kedah who have been deprived of collecting, promoting, operating or participating in pool betting, while it is allowed in other States in Malaysia." The Respondents argued that the Exco decision and the letters by the local authorities fell foul of Article 8 of the Federal Constitution which provided protection against unfair treatment. The argument did not find favour with the learned HCJ who was of the view that the $ 1^{\mathrm{st}} $ Respondent's decision was applicable across-the-board to all persons in the same class. Since there is no cross-appeal on that finding, nothing more needs to be said of it.

On the date fixed for decision on the appeals, my learned sister Justice Azizah Nawawi (now CJSS) dissented. My learned sister Justice Faizah Jamaludin and I were of the view that the appeals are to be dismissed, and the decision of the learned HCJ is to be affirmed. We have each set out our reasons in our respective judgments.

My learned sisters and I are unanimously of the view that there shall be no order as to costs, as the appeals are a matter of public interest. Dated the 6th day of February 2026 (Lim Hock Leng) Judge Court of Appeal Putrajaya, Malaysia. Counsel for the Appellants

Saifulrijal bin Azhari (LA)

Norhayati binti Ibrahim (ALA)

Nurul Liyana binti Mohammad Nasir [Pejabat Penasihat Undang-Undang Negeri Kedah] Counsel for the Respondents

Brian Foong Mun Loong

Eolanda Yeo Jin Huay

Muhammad Hiqmar Danial Bin Hidzir

Nur Ellyana Farina binti Muhammad Ello [Messrs Cheang & Ariff, Advocates & Solicitors]