Gin Poh Holdings Sdn Bhd v the Government of the State of Penang (BKA-1-12/2014(P))

1 IN THE FEDERAL COURT OF MALAYSIA (ORIGINAL JURISDICTION) SUIT NO. BKA-1-12/2014(P) __________________________________________ BETWEEN GIN POH HOLDINGS SDN BHD (COMPANY NO. 222445-X) (IN VOLUNTARY LIQUIDATION) … PETITIONER AND

1. THE GOVERNMENT OF THE STATE OF PENANG

2. THE GOVERNMENT OF MALAYSIA

3. DIRECTOR OF LANDS AND MINES PENANG

4. THE LAND ADMINISTRATOR, SOUTH WEST DISTRICT, PENANG

5. THE CHIEF MINISTER OF PENANG (INCORPORATION)

6. THE CHIEF MINISTER OF PENANG … RESPONDENTS CORAM: RAUS SHARIF, CJ ZULKEFLI AHMAD MAKINUDIN, PCA RICHARD MALANJUM, CJSS HASAN LAH, FCJ BALIA YUSOF WAHI, FCJ 2 JUDGMENT OF THE COURT Introduction [1] The Petitioner was granted leave by this Court on 9.8.2016, pursuant to Article 4(4) of the Federal Constitution, to bring this Petition against the Respondents. The Petitioner seeks the following reliefs:

(ii) a declaration that the Incorporation (State Legislatures Competency) Act, 1962 (Act 380), or alternatively section 3 and item 5 of the First Schedule thereof, in so far as it allows the incorporation of the Office of the Chief Minister of Penang with perpetual succession and permits the corporation to engage in commercial activities is/are invalid and void as being a law which Parliament has no power to make. Material facts [2] The Petitioner was the registered owner of ten parcels of land in Balik Pulau, Mukim 6, South West District, Penang (“the Lands”). 3 [3] The Lands were acquired by the Penang State Government (the 1st Respondent) through the Director of Lands and Mines, Penang (the 3rd Respondent) and the Land Administrator of the South West District of Penang (the 4th Respondent). The Lands were acquired for a public purpose under section 8 of the Land Acquisition Act 1960 (“LAA”), pursuant to a Declaration of Proposed Acquisition dated 27.8.2009 published in the Penang State Gazette. [4] On 25.5.2010, the 4th Respondent conducted an enquiry as required under section 12 of the LAA, and offered compensation in the sum of RM40,161,639.50 to the Petitioner. The Petitioner accepted the said compensation under protest. On 27.10.2010, the 4th Respondent took possession of the Lands from the Petitioner. [5] Thereafter, the Petitioner applied to the 4th Respondent to refer its objection as to the amount of compensation awarded to the High Court, under section 38 of the LAA. The proceedings were registered in the Penang High Court as Land Reference No. 15-122-2010. [6] On 2.3.2011, the High Court after hearing the parties ordered that the compensation sum be increased by RM4,803.195.50, with interest at the rate of 8% per annum from 27.10.2010 until full payment. Thus, the total sum of compensation awarded for the acquisition of the Lands was RM44,964,837, which was paid in full to the Petitioner. 4 [7] On 31.10.2013, the 4th Respondent alienated the Lands to the 5th Respondent, a body corporate established under the Chief Minister of Penang (Incorporation) Enactment 2009 (“Enactment 9”). The Lands were alienated with the express condition that the Lands were to be “used for educational purposes only”. [8] On 3.3.2014, the Petitioner as the Plaintiff filed civil suit No. 21NCVC- 4-03-2014 in the Penang High Court (“the Civil Suit”), naming the 1st, 3rd, 4th and 5th Respondents as defendants. The Petitioner challenged the validity of the acquisition and sought the return of the Lands, alleging that the acquisition was done mala fide and not for a public purpose. The Petitioner prayed, among others, for a declaration that the acquisition of the Lands was invalid, null and void. [9] The defendants in the Civil Suit have applied to strike out the same on the ground that the Petitioner lacks locus standi by virtue of section 68 of the LAA. The proceedings in the Civil Suit are still ongoing before the High Court. [10] The Petitioner took the position that the constitutionality of Act 380 and Enactment 9 cannot be dealt with by the Penang High Court. Thus, the Petitioner applied for leave to commence the present petition pursuant to Articles 4(4) and 128(1)(a) of the Federal Constitution. The Government of Malaysia (2nd Respondent) and the Chief Minister of Penang (6th Respondent) were included as Respondents in this Petition. 5 Petitioner’s Case [11] It is the Petitioner’s case that Act 380 is ultra vires the Federal Constitution and a law that Parliament did not have the power to enact. The Petitioner contended that:

(ii) Act 380 contravenes Article 71(4) of the Federal Constitution, which provides for instances when Parliament may legislate in respect of essential provisions in a State Constitution. Since the office of the Chief Minister was established under the State Constitution, it is for the State Constitution alone to spell out the status, capacity, nature and powers of the Chief Minister. Parliament does not have the power to allow State Legislatures to make law contrary to the State Constitution. 6 [12] The Petitioner further contended that Enactment 9, or alternatively sections 3, 4 and 5 thereof, is/are invalid and void as being a law which the Penang State Legislature has no power to make. It was argued on behalf of the Petitioner that:

(ii) the State Legislature does not have power to enact laws contrary to the State Constitution;

(iii) Enactment 9 provides for the 5th Respondent to engage in business. This is in contravention of Article 7(9) of the Penang State Constitution, which states that the Chief Minister shall not hold any office of profit nor actively engage in any commercial enterprise;

(iv) Enactment 9 provides for the 5th Respondent to enter into contracts, and acquire, hold or dispose of property. This renders otiose Article 9(1) of the Penang State Constitution, which states that the State has power to acquire, hold and dispose of property and to make contracts. Since the Chief Minister will not be answerable to the State Legislature and may act independently of the State Executive Council, Enactment 9 circumvents the Penang State Constitution; and 7

(ii) Act 380 allows State Legislatures to make laws in respect of incorporation, subject to the restriction that such incorporation must relate to matters listed in the First Schedule of that Act. The incorporation of the Chief Minister is provided for in item 5 of the First Schedule. [16] Further or in the alternative, the 2nd Respondent contended that a decision on the validity of Act 380 is unnecessary and unwarranted in the circumstances. It was contended that the decision of this Court on Act 380 would have no bearing on the core issues in the Civil Suit, which concern the validity of the acquisition and the applicability of section 68A of the LAA. [17] The 1st, 3rd, 4th and 6th Respondents contended at the outset that in proceedings under Article 4(3) and Article 128(1)(a) of the Federal Constitution, the essential complaint must be that the legislative body does not have power to enact the impugned law. It was contended that this Court is not empowered to consider complaints that the 9 impugned law contravened specific provisions of the Federal Constitution or State Constitution. [18] It was further contended that Parliament is empowered to enact laws relating to the incorporation of persons and bodies. The position of the 1st, 3rd, 4th and 6th Respondents may be summarised thus:

(ii) Article 74(4) states that the generality of expressions used in the Lists are not limited by specific expressions. The utility of rules of construction, including the ejusdem generis rule, is limited in interpreting entries in the Lists;

(iii) the ejusdem generis rule applies when particular words pertaining to a class, category or genus are followed by general words. The rule does not apply to item 8; and

(iv) based on these principles, the incorporation of bodies and persons is a matter falling within item 8 of the Federal List. 10 [19] It was asserted that Parliament is empowered to delegate that legislative power to the State Legislative Assemblies under Article 76A of the Federal Constitution, and did so through Act 380. There is no question, it was asserted, as to the competency of the Penang State Legislative Assembly to enact Enactment 9, which falls squarely within the First Schedule of Act 380. It was further highlighted that the implications of the reliefs prayed for in this Petition are far-reaching, for the incorporation of the Chief Minister is not peculiar to Penang; other States likewise have enactments conferring a general power for the incorporations of the respective Chief Ministers or Mentri-Mentri Besar. [20] The position of the 5th Respondent is largely similar to that of the 1st, 3rd, 4th and 6th Respondents. The 5th Respondent also added that, while challenges to Enactment 9 on the basis that it is ultra vires the Penang State Constitution lies beyond the scope of this Petition, in any event, Enactment 9 does not contravene the State Constitution. It was contended that:

(ii) the power given to the 5th Respondent under Enactment 9 does not fall foul of the prohibition on “commercial enterprise” in the Penang State Constitution, which refers to commercial activities for personal gain; and 11

(iii) under Enactment 9, the powers of the 5th Respondent are “subject to any written law and the approval of the State Executive Council”. The Chief Minister or the 5th Respondent would not be circumventing the State Constitution by acting independently. [21] The 5th Respondent further contended that the present Petition is an attempt by the Petitioner to avoid the application of section 68A of the LAA. It was contended that since the Petitioner’s complaint is against the constitutionality of section 68A, the issue should be raised in the High Court; the Petitioner has no real grouse against either Act 380 or Enactment 9. Scope of Articles 4(3), 4(4) and 128(1) of the Federal Constitution [22] It is necessary to define clearly the scope of the present proceedings at the outset. As stated earlier, this Petition was filed pursuant to Article 4(4) of the Federal Constitution. Clauses (3) and (4) of Article 4 read as follows:

4. Supreme law of the Federation

(1) …

(2) ...

(3) The validity of any law made by Parliament or the Legislature of any State shall not be questioned on the ground that it makes provision with respect to any matter with respect to which Parliament or, as the case may be, the Legislature of the State has no power to 12 make laws, except in proceedings for a declaration that the law is invalid on that ground or—

(4) Proceedings for a declaration that a law is invalid on the ground mentioned in Clause (3) (not being proceedings falling within paragraph (a) or (b) of the Clause) shall not be commenced without the leave of a judge of the Federal Court; and the Federation shall be entitled to be a party to any such proceedings, and so shall any State that would or might be a party to proceedings brought for the same purpose under paragraph (a) or (b) of the Clause. (emphases ours) [23] The jurisdiction of this Court, governed by the Federal Constitution, is of four kinds: appellate jurisdiction, exclusive original jurisdiction under Article 128(1), referral jurisdiction under Article 128(2), and advisory jurisdiction under Article 130 (Kulasingam v Public Prosecutor [1978] 2 MLJ 243 at 244). In filing this Petition, the Petitioner seeks to invoke the exclusive original jurisdiction of this Court under Article 128(1)(a) of the Federal Constitution:

128. Jurisdiction of Federal Court

(1) The Federal Court shall, to the exclusion of any other court, have jurisdiction to determine in accordance with any rules of court regulating the exercise of such jurisdiction—

(1) in the case of Federal written law, because it relates to a matter with respect to which Parliament has no power to make law, and in the case of State written law, because it relates to a matter which respect to which the State legislature has no power to make law, article 74; or

(2) in the case of both Federal and State written law, because it is inconsistent with the Constitution, see article 4(1); or

(3) in the case of State written law, because it is inconsistent with Federal law, article 75. The court has power to declare any Federal or State law invalid on any of the above three grounds. 14 The court's power to declare any law invalid on grounds (2) and (3) is not subject to any restrictions, and may be exercised by any court in the land and in any proceeding whether it be started by Government or by an individual. But the power to declare any law invalid on ground (1) is subject to three restrictions prescribed by the Constitution. First, clause (3) of article 4 provides that the validity of any law made by Parliament or by a State legislature may not be questioned on the ground that it makes provision with respect to any matter with respect to which the relevant legislature has no power to make law, except in three types of proceedings as follows:–

(ii) under Article 74(2), the State Legislature has power to make law with respect to matters in the State List or the Concurrent List (Lists 2 and 3 of the Ninth Schedule);

(iii) under Article 76, in certain circumstances, Parliament may exceptionally make law with respect to matters in the State List; and 17

(iv) under Article 76A, in certain circumstances, the State Legislature may exceptionally make law with respect to matters in the Federal List. [27] Thus, the applicability of Articles 4(3), 4(4) and 128(1)(a) is confined to situations where Parliament or the State Legislature has strayed beyond matters within their legislative competence based on the constitutional provisions in (i)-(iv) above. The ambit and operation of Articles 4(3), 4(3) and 128 were neatly summarised by Azmi LP in Yeoh Tat Thong v Government of Malaysia & Anor [1973] 2 MLJ 86 at 87: “In my view, clauses 3 and 4 of Article 4 have reference only to suits where a challenge is made to the validity of primary legislation on the ground that Parliament has made a law which is on the State list, (see schedule 9 of the Constitution) or on the ground that a State has made a law which is within the Federal list. It is only in such suits (except where the proceedings are between the Federation and one or more States) that leave under clause 4 is necessary; and in view of Article 128 the Federal Court has exclusive jurisdiction to determine such question. Leave referred to in clause 4 is therefore leave to bring the matter before the Federal Court… Apart from all that, it is my view that the High Court and indeed even subordinate courts have jurisdiction to determine any question affecting the provisions of the Federal Constitution, except where the matter comes under Article 4.” [28] Articles 4(3), 4(4) and 128(1)(a) have been used to challenge the validity of laws on the basis that: 18

(ii) the State Legislature made law on a matter not in the State List (Sulaiman bin Takrib v Kerajaan Negeri Terengganu (Kerajaan Malaysia, intervener) and other applications [2009] 6 MLJ 354, Fathul Bari bin Mat Jahya & Anor v Majlis Agama Islam Negeri Sembilan & Ors [2012] 4 MLJ 281); and

(iii) Parliament, in exercising the power to make law on matters in the State List under Article 76, failed to satisfy the conditions specified therein (East Union (Malaysia) Sdn Bhd v Government of State of Johore & Anor [1980] 2 MLJ 143; Government State of Penang & Anor v Government of Malaysia & Anor [2014] 6 MLJ 322). [29] However, the exclusive jurisdiction of this Court does not extend to all matters of constitutionality. The distinctive nature of challenges within the scope of Articles 4(4) and 128(1) was explained by this Court in Syarikat Banita (supra) at 218: “The validity of the new subsection is to be challenged not on the ground that it deals with a matter with respect to which the Sabah legislature has no power to make law (on the contrary, as already stated, it was conceded that it deals with a matter within the competence of that legislature). It is to be challenged on the ground that it is contrary to several provisions of the constitution. The fact, if such be it, that it is so contrary does not mean that it deals with a 19 matter with respect to which the State legislature has no power to make law.” (emphasis ours) [30] The effect of Articles 4(4) and 128(1)(a) is illustrated by the facts of Ah Thian (supra) itself. There, the applicant sought to challenge the validity of the Firearms (Increased Penalties) Act on the ground that it is inconsistent with Article 8(1) of the Federal Constitution. Noting that the impugned Act relates to matters within the Federal List, this Court held that Articles 4(4) and 128(1) did not apply. Suffian LP said (at 113): “The applicant says that the Act is invalid because it is inconsistent with the Constitution, i.e. on ground (2) set out in paragraph 9 above. Therefore clause (4) of article 4 and clause (1) of article 128 do not apply and the point may be raised in the ordinary way in the course of submission, and determined in the High Court, without reference to the Federal Court, and there is no need for leave of a judge of the Federal Court. True the learned judge has power under Section 48 of the Courts of Judicature Act 1964 (L.M. Act 91) to stay the proceedings before him and refer a matter like this to the Federal Court. He has not however done so in this case(this is an application by the accused). But in any event matters like this as a matter of convenience and to save the parties time and expense are best dealt with by him in the ordinary way, and the aggrieved party should be left to appeal in the ordinary way to the Federal Court.” (emphases ours) 20 [31] The rationale for construing strictly the limits of the exclusive original jurisdiction of this Court was explained in Rethana v Government of Malaysia [1984] 2 MLJ 52. In that case, the Employees’ Social Security Act 1969 was challenged not on the basis that Parliament had no power to enact it, but on the basis of inconsistencies with provisions in the Federal Constitution. This Court held that since the subject matter of the Act is covered by the Federal List, the suit is within the original jurisdiction of the High Court and ought not be litigated at the first instance before this Court. Per Mohamed Azmi FJ (as His Lordship then was) at 54: “Under our Constitution, the Federal Court is an appellate Court and its exclusive original jurisdiction is limited. In my opinion, this particular original jurisdiction of the Federal Court conferred by Article 128(1)(a) read with section 45 of the Courts of Judicature Act 1964 should be strictly construed and confined to cases where the validity of any law passed by Parliament or any State Legislature is being challenged on the ground that Parliament has legislated on a matter outside the Federal List or Concurrent List; or a State Legislature has enacted a law concerning a matter outside the State List or the Concurrent List as contained in the ninth Schedule to the Federal Constitution. To extend the exclusive original jurisdiction of the Federal Court to matters which are not expressly provided by the Constitution would apart from anything else, deprive aggrieved litigants of their right of appeal to the highest Court in the land.” (emphases ours) 21 [32] To summarise, the following principles can be distilled from the line of authorities above in relation to the scope and operation of Articles 4(3), 4(4) and 128(1)(a) of the Federal Constitution:

(ii) an impugned law deals with a matter with respect to which the relevant legislative body has no power to make law if: a. Parliament made law on a matter not within the Federal List; b. the State Legislature made law on a matter not within the State List; c. Parliament made law on a matter within the State List pursuant to Article 76, but failed to comply with the requirements in the said Article; or d. the State Legislature made law on a matter within the Federal List pursuant to Article 76A(1), but failed to comply with the requirements in the said Article.

(iii) a challenge to the validity of a legislation on that ground is subject to the following restrictions: a. it may only be commenced in three types of proceedings (Article 4(3)): (aa) proceedings for a declaration that a law is invalid on that ground; 22 (ab) if the law was made by Parliament, proceedings between the Federation and one or more States; (ac) if the law was made by a State Legislature, proceedings between the Federation and that State. b. proceedings of type (iii)(a)(aa) above may only be commenced with the leave of the Federal Court (Article 4(4)). Leave is not required for the other two types of proceedings in (iii)(a)(ab) and (ac); and c. the Federal Court has exclusive original jurisdiction to determine the matter (Article 128(1)(a)). [33] A different construction of the scope of Articles 4(4) and 128(1)(a) appears to have been adopted in a handful of cases. The ground of challenge that a law relates to “matters with respect to which the legislative body has no power to make laws” was given a wider interpretation, extending to challenges that an Act contravenes the fundamental liberties provisions in the Federal Constitution and that a State Enactment is inconsistent with Federal law. We observe that the cases in favour of the wider interpretation do not offer a clear juridical foundation for the alternative construction, and are not altogether reconcilable with the dominant position settled by the line of authorities discussed earlier. [34] It is not insignificant that the position in Ah Thian (see also Gerald Fernandez v Attorney-General, Malaysia [1970] 1 MLJ 262, Syarikat Banita (supra), East Union (supra)) was elucidated by none other than Tun Suffian LP, who, having helped draft the Malayan 23 Constitution in 1956-7 and its predecessor the Federation of Malaya Agreement 1948, was well-placed to understand the intricacies of our constitutional provisions (Tun M Suffian, “Four Decades in the Law – Looking Back” in F A Trinidade & H P Lee, The Constitution of Malaysia: Further Perspectives and Developments (Singapore: Oxford University Press, 1986)). We see no reason to depart from the position in Ah Thian as restated earlier. To avoid confusion, we would thus consider that the reasoning in the handful of cases adopting the wider approach are best confined to the peculiar facts and exigencies therein. General jurisdiction of the High Court [35] Challenges to the validity of legislation on grounds other than the specific ground in Articles 4(4) and 128(1)(a) are available to all litigants in all proceedings (KC Vohrah, PTN Koh, PSW Ling (eds), Sheridan & Groves The Constitution of Malaysia, 5th edition (Kuala Lumpur: Malayan Law Journal, 2004) at 46). The High Court is competent to hear such challenges, for the general scheme of the Federal Constitution is to empower the High Court to pronounce on the constitutionality of Federal and State laws (Gerald Fernandez v Attorney-General, Malaysia [1970] 1 MLJ 262 at 264). [36] It bears emphasis and repetition that not all matters of constitutionality come under the exclusive jurisdiction of the Federal Court. The Federal Court is not a constitutional court, but the final arbiter on the meaning of constitutional provisions (A Harding, Law, Government 24 and the Constitution in Malaysia (Kuala Lumpur, Malayan Law Journal: 1996) at 138). All courts, not just the Federal Court, have the power to interpret the Constitution (per Tun M Suffian,“The Judiciary - During the First Twenty Years of Independence” in Tun M Suffian, H P Lee, F A Trinidade (eds.), The Constitution of Malaysia, Its Development: 1957-1977 (Kuala Lumpur, Oxford University Press: 1978) at 237). Only challenges as to the competence of the legislative body to enact a law fall within the original jurisdiction of the Federal Court; all other grounds of challenge to the constitutional validity of a law are within the jurisdiction of the High Court. [37] While section 84 of the Courts of Judicature Act 1964 allows the High Court to refer questions regarding the effect of any provision of the Constitution to the Federal Court, the High Court is not obliged to do so and may dispose of the questions (Tan Sri Mohamed Suffian bin Hashim, An Introduction to the Constitution of Malaysia (Kuala Lumpur: Jabatan Chetak Kerajaan, 1972) at 96; Hashim bin Saud v Yahaya bin Hashim & Anor [1973] 2 MLJ 85 at 85). Indeed, this Court has expressed a preference for the High Court to determine constitutional questions itself in Mark Koding v Public Prosecutor [1982] 2 MLJ 120 at 123-124: “Secondly, we would observe that it would have been better if the learned Judge had not referred this matter to us but instead had himself decided the constitutional questions which arose (he had jurisdiction to do so: Fernandez v Attorney-General [1970] 1 MLJ 262, 264) and decided the case one way or the other. If he had done that 25 and there were an appeal to us, the whole matter would have been disposed of in two steps. By referring this matter to us without deciding it one way or another, should there be an appeal from his decision on the charge, this matter would come back to us a second time, and thus will have to be disposed of in four steps: causing delay and additional expense, instead of helping in the words of section 48(2) of the Courts of Judicature Act, towards the speedy and economical final determination of these proceedings.” (emphasis ours) [38] As such, it is clear that Articles 4(3), 4(4) and 128(1)(a) do not apply to challenges to the validity of legislation on any other ground than where a legislative body has made law on matters beyond its legislative competence. These other grounds include challenges on the basis that the law is inconsistent with certain provisions in the Federal or State Constitution, and that a State Enactment is inconsistent with Federal law. Challenges on other grounds are not subject to any of the restrictions above, and the High Court has jurisdiction to determine the matter. Scope of this Petition [39] Turning to the grounds of invalidity raised in the present Petition, we note that the Petitioner has contended that Parliament lacked legislative competence to enact Act 380, which relates to matters not covered in the Federal List. This ground falls squarely within the scope 26 of proceedings commenced under Articles 4(4) and 128(1)(a). However, other grounds of invalidity were also submitted by the Petitioner, broadly:

(ii) the State Legislature does not have the power to enact Enactment 9, which contravenes various provisions in the Penang State Constitution. [40] A similar situation where some, but not all, grounds of invalidity raised fell within the scope of Articles 4(4) and 128(1)(a) was dealt with by the then Supreme Court in Nordin bin Salleh v Kerajaan Negeri Kelantan & Anor [1993] 3 MLJ 344. There, the applicant applied for leave to commence proceedings under Article 4(4) for declarations that section 73 of the Kelantan Council of Religion and Malay Custom Enactment 1966 was invalid on various grounds. The Supreme Court granted leave in respect of the declaration sought that the Kelantan State Legislature had no power to enact the impugned section, which relates to a matter not in the State List but in the Federal List. The Supreme Court refused leave in respect of the declaration sought that the section was inconsistent with Article 10 of the Federal Constitution (at 351): “As para (c) of the notice of motion was to seek a declaration that s 73 of the Enactment was void on the grounds that it was inconsistent with 27 the provisions of art 10(1)(a) of the Constitution and not on the grounds that it dealt with a matter with respect to which the Kelantan legislature had no power to deal with, the High Court has jurisdiction in the matter and the leave of a judge of the Supreme Court was not required. As for the prayers in paras (a) and (b) of the notice of motion, I was satisfied that the applicant had an arguable case in that the application is not frivolous. I am of the view that the Enactment is a post-Merdeka legislation and the intended challenge is on the competency of the Kelantan state legislature to enact the legislation. The two prayers are not merely grounded on the impugned law being inconsistent with the Constitution, also the validity of the legislation is to be challenged on the grounds that it deals with a matter with respect to which the state legislature has no power to make law. As such, leave of a judge of the Supreme Court is required under art 4(4) and the applicant should be allowed to canvass his case before the full court on the constitutionality and validity of that section in the said Enactment. I therefore made an order granting leave to the applicant to file proceedings in the Supreme Court for declarations in terms of prayers (a) and (b) of the said notice of motion.” (emphasis ours) [41] For the purposes of this Petition, we will thus confine our determination as to the validity of Act 380 and Enactment 9 to whether:

(ii) Enactment 9 relates to a matter within the legislative competence of the Penang State Legislature. 28 [42] Other grounds of invalidity raised by the Petitioner lie beyond the scope of a Petition filed under Articles 4(4) and 128(1)(a). We also note that the Petitioner has not sought for a declaration of invalidity in respect of section 68A of the LAA; neither is the validity of section 68A challenged on the ground that it concerns a matter with respect to which Parliament had no power to legislate. These other submissions may be pursued before the High Court, which has jurisdiction to determine the validity of the impugned laws on those grounds. Interpretation of Legislative Lists [43] The starting point for determining legislative competence is Article 74 of the Federal Constitution. The law-making powers of Parliament and the State Legislatures are provided for respectively in clauses (1) and

(2) of Article 74:

74. Subject matter of federal and State laws

(1) Without prejudice to any power to make laws conferred on it by any other Article, Parliament may make laws with respect to any of the matters enumerated in the Federal List or the Concurrent List (that is to say, the First or Third List set out in the Ninth Schedule).

(2) Without prejudice to any power to make laws conferred on it by any other Article, the Legislature of a State may make laws with respect to any of the matters enumerated in the State List (that is to say, the Second List set out in the Ninth Schedule) or the Concurrent List. 29 [44] Article 76A authorises Parliament to delegate its legislative power on a matter in the Federal List to the State Legislatures: Power of Parliament to extend legislative powers of States 76A. (1) It is hereby declared that the power of Parliament to make laws with respect to a matter enumerated in the Federal List includes power to authorize the Legislatures of the States or any of them, subject to such conditions or restrictions (if any) as Parliament may impose, to make laws with respect to the whole or any part of that matter. [45] The entry in the Federal List pertinent to the present case is item 8(c), which reads:

8. Trade, commerce and industry, including—

(1883) 9 App Cas 117. But the power is plenary only with respect to the specified subject.” (emphasis ours) [60] The above passages in Ketua Pengarah Jabatan Alam Sekitar (supra) were quoted in full with approval by this Court in Fathul Bari bin Mat Jahya & Anor v Majlis Agama Islam Negeri Sembilan & Ors [2012] 4 MLJ 281 at 292-293. This Court in Fathul Bari accorded a wide and liberal meaning to the phrase “precepts of Islam” in the State List, and held that section 53 of the Syariah Criminal Enactment (Negeri Sembilan) 1992 fell within the competence of the State Legislature under that entry. 40 [61] In brief, the principles applicable to the interpretation of entries in the legislative lists as established in the cases above may be condensed thus:

(ii) the entries must be interpreted liberally with the widest amplitude, and not narrowly or restrictively. Each entry extends to all ancillary and subsidiary matters which can fairly and reasonably be said to be comprehended in it;

(iii) the rule of widest construction does not permit an entry to be interpreted so as to include matters with no rational connection to it, or to override or render meaningless another entry;

(iv) in the event of apparent conflict or overlap between entries, the Court should attempt to reconcile the entries by adopting a harmonious construction; and

(4) Where general as well as specific expressions are used in describing any of the matters enumerated in the Lists set out in the Ninth Schedule the generality of the former shall not be taken to be limited by the latter. [67] Hence, the rule of ejusdem generis lends no support to the Petitioner’s case in respect of the interpretation of entries in the legislative lists. Based on the above principles, the words “incorporation… of corporations other than municipal corporations” in item 8(c) of the Federal List ought to be given the widest amplitude. Interpreting the phrase broadly, the incorporation of the office of the Chief Minister is 43 clearly a matter which can fairly and reasonably be said to be comprehended in item 8(c). There is nothing in item 8(c) to suggest that the legislative power of Parliament is restricted to specific types of corporations (other than municipal corporations), such as corporations aggregate established under the Companies Act. [68] For the above reasons, we hold that under Article 74 and item 8(c) of the Federal List, the legislative competence of Parliament encompasses matters with respect to the incorporation of the Chief Minister of Penang, and all matters ancillary, subsidiary or incidental thereto. Pith and substance [69] We turn to consider whether Act 380 and Enactment 9, in pith and substance, relate to a matter within the legislative competence of Parliament and the Penang State Legislature respectively. [70] The “pith and substance” test requires the court to ascertain “the true nature and character of the legislation and scrutinise it in its entirety, to decide whether it is a lawful exercise of the legislative authority of Parliament in relation to the entry” (Attorney-General for Ontario v. Reciprocal Insurers and Others [1924] AC 328 at 337, Privy Council; see also the Privy Council’s decision in Union Colliery Co of British Columbia v Bryden [1899] AC 580). This test was accepted and applied by both the majority and dissenting views in the then Supreme Court in Mamat bin Daud (supra). Mohamed Azmi SCJ (as His 44 Lordship then was), for the majority, described the test as follows (at 123): “In determining whether section 298A, in pith and substance, falls within the class of subject matter of ‘religion’ or ‘public order,’ it is the substance and not the form or outward appearance of the impugned legislation which must be considered. The impugned statute may even declare itself as dealing with religion, but if on investigation of the legislation as a whole, it is in fact not so, the court must so declare. Conversely, it is not sufficient for the impugned legislation to declare itself as dealing with public order if, in substance, it seeks to deal directly or indirectly with religion or religious law, doctrine or precept, for no amount of cosmetics used in the legislative make-up can save it from being struck down for pretending to be what it is not. The object, purpose and design of the impugned section must therefore be investigated for the purpose of ascertaining the true character and substance of the legislation and the class of subject matter of legislation to which it really belongs.” (emphasis ours) [71] The connection between the substance of the legislation and the matter must not be too indirect or remote to fall within the entry in the legislative list (In re a Reference as to the Validity of Section 5(a) of the Dairy Industry Act [1951] AC 179 at 200-201, Privy Council). Incidental effects on matters outside the authorised field do not invalidate the legislation. Per Lord Atkin in Gallagher v Lynn [1937] AC 863 at 870: 45 “If, on the view of the statute as a whole, you find that the substance of the legislation is within the express powers, then it is not invalidated if incidentally it affects matters which are outside the authorized field. The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field. Nor are you to look only at the object of the legislator. An Act may have a perfectly lawful object, e.g., to promote the health of the inhabitants, but may seek to achieve that object by invalid methods, e.g., a direct prohibition of any trade with a foreign country. In other words, you may certainly consider the clauses of an Act to see whether they are passed ‘in respect of’ the forbidden subject.” (emphasis ours) [72] However, if the encroachment is ostensibly ancillary but in truth beyond the competence of the legislative body, the legislation will be colourable and constitutionally invalid (Gujarat Ambuja Cements Ltd v Union of India (2005) 4 SCC 214). The doctrine of colourable legislation was explained by the Indian Supreme Court in K C Gajapati Narayan Deo v State of Orissa (1954) SCR 1, quoted by the majority in Mamat bin Daud (supra): “It may be made clear at the outset that the doctrine of colourable legislation does not involve any question of ‘bona fides’ or ‘mala fides’ on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand, if the legislature lacks competency, the question of motive does not arise at all. Whether a statute is constitutional or not is thus always a question of power… 46 If the constitution of a state distributes the legislative powers amongst different bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamental rights, questions do arise as to whether the legislature in a particular case has or has not, in respect to the subject-matter of the statute or in the method of enacting it, transgressed the limits of its constitutional powers. Such transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of cases that the expression 'colourable legislation' has been applied in certain judicial pronouncements. The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears on proper examination to be a mere pretence or disguise.” (emphasis ours) Substance of Act 380 and Enactment 9 [73] Bearing in mind the principles aforementioned, we now examine Act

380. The long title of Act 380 states that it is “An Act relating to the powers of State Legislatures to make laws with respect to the incorporation of certain persons and bodies within a State.” Section 3 of the Act states: State Legislatures authorized to make laws relating to the incorporation of certain persons and bodies

3. It shall be within the power of the Legislature of a State, in relation to any matter specified in the First Schedule, to make laws with 47 respect to the incorporation of any person or body within the State, and for such incidental and consequential matters in relation thereto (including the regulation and winding up of any person or body so incorporated) as the Legislature may deem necessary; and the Legislature may from time to time amend or repeal any such laws: Provided that with respect to the incorporation of any person or body within the State for the purpose of agricultural development or housing development or of development of urban or rural areas, the special provisions prescribed in the Second Schedule hereto shall have effect. [74] Item 5 in the First Schedule provides for the “Incorporation of the Mentri Besar or Chief Minister”. [75] It is not disputed that Act 380 relates, in pith and substance, to the incorporation of persons and bodies within a State. As discussed earlier, the incorporation of corporations (excluding municipal corporations), including all ancillary matters, are encompassed under item 8(c) of the Federal List. Additionally, Parliament is expressly authorised by Article 76A of the Federal Constitution to delegate its legislative powers in respect of matters in the Federal List to the State Legislatures. In the present case, Parliament did so by enacting Act 380, which authorises State Legislatures to make laws with respect to the incorporation of, among others, the Chief Minister. [76] Exercising the delegated legislative power pursuant to Act 380, and in accordance with section 3 and the First Schedule thereof, the Penang State Legislature passed Enactment 9. Section 3 of Enactment 9 48 provides for the incorporation of the Chief Minister of Penang. Sections 4 and 5 of the same state the various powers of the Chief Minister of Penang incorporated, which can be fairly and reasonably comprehended as matters ancillary or incidental to its incorporation. [77] It is evident to us that Act 380 relates to a matter enumerated in the Federal List, thus within the legislative competence of Parliament under Article 74. Enactment 9 relates to a matter enumerated in the Federal List, on which the power to make laws has been validly delegated by Parliament to the State Legislature under Article 76A. We do not consider that in doing so, Parliament or the State Legislature had covertly or indirectly encroached upon forbidden territory. [78] Accordingly, we find that Act 380 makes provision with respect to a matter which Parliament has power to make laws, whereas Enactment 9 makes provision with respect to a matter which the Penang State Legislature has power to make laws. Conclusion [79] In view of the foregoing, we do not find Act 380 and Enactment 9 to be invalid on the ground that the laws relate to matters beyond the legislative competence of Parliament and the State Legislature respectively. The remaining grounds of invalidity raised by the Petitioner lie beyond the scope of this Petition and the exclusive original jurisdiction of this Court. 49 [80] The petition is dismissed. Pursuant to section 83 of the Courts of Judicature Act 1964, we make no order as to costs. Dated this 12th day of March 2018. RAUS SHARIF Chief Justice of Malaysia Counsel for the Petitioner: Datuk Seri Gopal Sri Ram T. Gunaseelan Balwant Singh David Yii Solicitors for the Petitioner: Messrs Balwant Singh & Co Counsel for the 1st, 3rd, 4th and 6th Respondents: Dato’ Malik Imtiaz Sarwar Siti Fatimah Talib Charanjit Singh a/l Mahinder Singh Chan Wei June Surendra Ananth Solicitors for the 1st, 3rd, 4th and 6th Respondents: Pejabat Penasihat Undang-Undang Negeri Pulau Pinang Counsel for the 2nd Respondent: Alice Loke Yee Ching, SFC Shaiful Nizam bin Shahrin, FC 50 Solicitors for the 2nd Respondent: Attorney General’s Chambers Counsel for the 5th Respondent: Karin Lim Ai Ching Dominic Pillai Solicitors for the 5th Respondent: Messrs Presgrave Matthews