Judges' pensions are a protected right under Article 125(7) of the Federal Constitution, and any alteration to the pension adjustment formula that disadvantages retired judges is unconstitutional.

JUDGMENT

Ravinthran Paramaguru JCA (Majority):

Introduction

[1] Datuk Ian Chin Hon Chong is a retired judge. In the High Court, he successfully challenged legislation that provided a new formula for adjustment of Judges' pensions on the ground that it is disadvantageous and therefore infringed a constitutionally protected right accorded to Judges. Hence, the main appeal is by the Government of Malaysia and the Public Service Department who are aggrieved by the said decision of the High Court that declared the legislation in question null and void and ordered them to pay the affected Judges to make up for the "shortfall" in the adjustment of their respective pensions. The cross-appeal is by the respondent. It is in respect of the order of the High Court that some deduction must be made in the calculation of the "shortfall" to take into account monies already paid.

[2] The action was brought by Datuk Ian Chin Hon Chong on behalf of himself and all other retired Judges of the High Court of Sabah and Sarawak who were appointed before 1 July 2015 and all those receiving derivative pensions on account of the death of the affected Judges. For the sake of convenience, I shall refer to Datuk Ian Chin Hon Chong as the respondent and the pension that is the subject of contention as Judges' pensions although the same principle would also apply to derivative pensions.

Background Facts

[3] The detailed background facts have been sufficiently set out in the High Court judgment. I shall summarize some essential facts below.

[4] The respondent was appointed as a Judicial Commissioner on 1 March 1992. Subsequently, on 20 August 1993, he was appointed as a Judge of the High Court of Borneo (now High Court of Sabah and Sarawak). He retired on 1 December 2009 after serving 16 years and 9 months (a total of 201 months) as a Judicial Commissioner and a High Court Judge. He qualified for a pension. Under the then existing law, ie s 15B of the Judges Remuneration Act 1971 (Act 45) (hereinafter "the JRA "), the pension of a retired Judge and the derivative pension was subject to adjustment with reference to "current salary" in accordance with the formula given in the now deleted Third and Fourth Schedules of the . Section 15B (1), prior to amendment, read as follows:

15B(1) Subject to Part III and this Part, pensions and other benefits granted to Judges and their dependants under that Part before or on the implementation of any current salary shall be adjusted in accordance with this Act and shall be paid or be payable with effect from the date of implementation of the current salary.

[Emphasis Mine]

[5] The formula given in the Third Schedule for the adjustment of the pension of a Judge read as follows:

1/360 x number of months of service (subject to not more than 216 months) corresponding last drawn salary; as adjusted, which is paid or payable in the case of a judge who retires under s 8(d) or under s 8A shall not be less that 1/5 of the judge's corresponding last drawn salary.

[Emphasis Supplied]

[6] A similar formula was provided in the Fourth Schedule for derivative pensions. The above provisions enacted that a retired Judge's pension and derivative pension will be adjusted whenever the current salary of the serving Judge was increased in accordance with the formulae in the Third and Fourth Schedules. It follows that if the salary increment given to a serving Judge is substantial, the increment in the pension of a retired Judge would similarly be substantial. However, on the other hand, in a situation of prolonged absence of salary revision, the pension of a retired Judge would remain stagnant indefinitely regardless of the increase in the costs of living. Thus, Judges' pensions were not tied to the actual last drawn salary of the retired Judge. The formulae prescribed in the Third and Fourth Schedules were introduced to the JRA through the Judges' Remuneration (Amendment) Act 1984 (Act A609) that operated retrospectively with effect from 1 July 1980.

[7]