PUTRAJAYA (May 7): The Court of Appeal (COA), in a majority decision, upheld the Kota Kinabalu High Court's decision to declare the amended Judges’ Remuneration Act 2014 was unconstitutional for judges who retired before 2015. According to the amended Act, serving judges are granted a 2% annual pension rise based on their last drawn salary.

Judges Datuk P Ravinthran and Datuk Azimah Omar, who were in the majority in dismissing an appeal by the government and Public Services Department (PSD), said that according to Article 125(7) of the Federal Constitution, ex-judges of the High Court, COA and Federal Court are entitled to pension, and any adjustment must not be unfavourable to them.

Article 125(7) stipulates that the remuneration and other terms of office (including pension rights) of a judge shall not be altered to his disadvantage after his appointment.

Ravinthran said he and Azimah were bound by the principle of stare decisis (to stand by things that had been decided) in the case brought by Aminah Ahmad and 56 other pensioners, where the apex court ruled that the pension adjustment made to other civil servants in 2013 were not favourable and had to be struck out.

In Aminah's case, the Federal Court ruled that the Pension Adjustment (Amended) Act’s Section 3(2) that was passed in 2013 had placed ex-civil servants in a “less favourable position” than previously, following a fixed 2% increase on their entitlement.

This follows the apex court finding that the amended Section 3(2) had breached constitutional protection accorded to pensioners as stipulated under Section 147 of the Federal Constitution.

Ravinthran, in his broad grounds, said he and Azimah do not agree with the submissions made by senior federal counsels Shamsul Bolhassan and Liew Horng Bin, who appeared for the government.

“We do not see the merit in their argument that the pension adjustment is a form of additional benefit for judges. In my opinion, the amendment runs contrary to Article 125(7) and (9) of the Constitution,” he said.

“I am also of the view that this appellate court is bound by the Federal Court [decision] in the Aminah case which dealt with [a] similar amending law on pension adjustment, where it is similar and on the same subject matter. Therefore, in our respectful opinion, the doctrine of stare decisis applies as well,” Ravinthran added.

He said all the respondents were affected since 2015, and hence those who retired before 2015 are entitled to better pensions.

“My learned sister Azimah had read this and agreed with this. In the upshot, the appeal by the government and PSD is dismissed,” he added.

Dissenting judge: Must show ex-judge deeply affected

Judge Datuk Dr Lim Chong Fong, who dissented, opined that the court should not be bound by the Aminah decision, and that the affected retired judge Datuk Ian Chin had not shown how he was deeply affected by the pension adjustment.

Lim said that relief cannot be granted based on a hypothetical basis, citing a Canadian court case where actual loss had to be proven and the pension adjustment for judges cannot be struck down like that.

“I find the Aminah decision is not persuasive in this instance,” he ruled in allowing the government's and PSD's appeal, as the 2014 amendment was to encourage more lawyers to join the judiciary.

Chin, who retired in 2008 as a judicial commissioner and Kota Kinabalu High Court judge, had commenced his legal action in 2022, alleging the pension paid to him after 2015 was less favourable to him.

High Court judge Leonard David Shim in his decision two years ago declared the Judges’ Remuneration Act 2014 as void and inconsistent with Article 125(7), as he held that the remuneration and pensions of judges cannot be at a disadvantage after their appointment.

Shim ruled that the government and PSD had violated Article 125(7) by failing to pay what was due to Chin and directed that Chin be compensated RM301,768.60, being the shortfall in the pension paid to him between July 2016 and February 2022.

Chin, who represented himself, claimed the salary revision implemented in 2015 for judges provided a higher pension plus a 2% increment for those who retired after the amendment, and this is contrary to those who retired before 2015, as they received pensions based on their old salary plus a 2% increment.