PUTRAJAYA, March 9 — The government has succeeded in its appeal to set aside a High Court decision that ordered it to pay pension arrears amounting to RM1.7 billion to 531,976 pensioners based on their final salary, according to the 2016 Public Services Department Circular.
The decision was made by a three-member bench of the Court of Appeal comprising Justices Datuk Lim Chong Fong, Datuk Azhahari Kamal Ramli, and Datuk Meor Hashimi Abdul Hamid in a judicial review application filed by Aminah Ahmad, who retired as a civil servant with the Foreign Ministry.
Reading out the unanimous decision, Justice Azhahari said the issue of pension adjustments had already been decided by a previous Court of Appeal in 2022 in relation to Aminah’s first legal action (originating summons (OS)) in 2017.
Following today's decision, the government does not have to pay the amount to the pensioners.
Aminah filed the judicial review application on January 12, 2024, in her own capacity and on behalf of 56 retired public service members.
Justice Azhahari said her pension entitlement and her entitlement to the arrears, which were the subject matter of the 2017 OS, had been determined by the Court of Appeal.
“Hence, issue estoppel would prevent her from relitigating the same issue at the judicial review's application. Even if res judicata does not apply, the court should also consider whether the doctrine of abuse of process is applicable to the facts of the case,” he said.
In the present appeal, the High Court judge in the judicial review application did not correctly consider the doctrine of abuse of process.
“In our view, the High Court judge fell into error when he merely considered the applicability of the doctrine of res judicata only, without correctly considering the doctrine of abuse of process and applying it to the facts of the case,” Justice Azhahari said.
He added that Aminah had not appealed against the decision of the High Court judge in the 2017 OS that she had failed to prove her losses as a result of Sections 3 and 7 of the Pensions Adjustment Act (Amendment) 2013 (PAA 2013) (2013 Amendment Act).
The High Court judge had decided that the applicant’s contention that the implementation of the two per cent annual rate of pension increment is less favourable compared to the adjustment of pension based on salary revision prior to the amendment made under the 2013 Amendment Act, was incorrect, hence the issue of loss was not proven.
“In our view, the issue of loss that was raised in the 2017 OS was meant to support her prayer for the payment of the arrears of her pension,” Justice Azhahari said.
He noted that Public Services Department (JPA) No 1 Circular 2016 should be raised in the 2017 OS, and the issue of the applicant’s entitlement to pension adjustment based on the pre-2013 Amendment Act belongs to the claim in the 2017 OS.
“It ought to have been brought forward as part of the subject in the 2017 OS, but they have not done so, probably due to inadvertence or accident. In the circumstances, under the law, the judicial review application is prohibited by res judicata as issue estoppel,” Justice Azhahari said.
The appellate court held that the filing of the judicial review application constituted an abuse of process, with the intention of relitigating the issue of payment of arrears in the pension adjustment.
Similarly, the issue of whether the JPA No. 1 Circular 2016, referred to earlier, constitutes a salary revision for civil servants and entitles the applicant to a pension adjustment is irrelevant in this appeal.
“In the circumstances, we are of the opinion that this is an appropriate case where we should exercise appellate intervention to correct the plain error committed by the learned High Court judge. This appeal is hereby allowed. We set aside the decision of the learned High Court judge,” he said.
The bench made no order as to costs since this appeal is of wide public interest and concern.
On January 16, 2025, High Court Judge Datuk Amarjeet Singh, when allowing Aminah's judicial review, ordered the JPA director-general and the government to pay the arrears within three months of the judgment date (Jan 16).
However, on March 4, 2025, he allowed the government's application to stay the payment of pension arrears to 531,976 pensioners, amounting to RM1.7 billion, pending the disposal of its appeal at the Court of Appeal.
Aminah initially lost her OS case at the High Court in 2020. She then appealed to the Court of Appeal, which decided in her favour. The government and the JPA director-general then obtained leave to appeal from the Federal Court in 2023.
On June 27, 2023, the Federal Court affirmed the Court of Appeal's decision that declared the amended pension null and void. The five-member bench also dismissed the government's and the JPA director-general's appeal to overturn the appellate court's decision.
Following that, Aminah filed the judicial review application seeking a mandamus order to compel the respondents to expedite the pension adjustments to the qualifying amount following the formula contained in Sections 3 and 6 of the Pensions Adjustment Act 1980 (PAA 1980) before amendments were made under Sections 3 and 7 of the Pensions Adjustment Act (Amendment) 2013 (PAA 2013).
She also sought an order requiring the respondents to pay the pension arrears within 14 days, along with a declaratory order stating that the failure to pay violates the Federal Constitution.
Under the old scheme, the retiree's pension is revised based on the prevailing salary of incumbent civil servants in that grade. However, the 2013 amendment was introduced on a flat two per cent annual increment.
When met after the proceedings, Aminah’s lawyer Datuk Baljit Singh Sidhu said that they would file an appeal at the Federal Court.
The government and the JPA were represented by senior Federal counsel Ahmad Hanir Hambaly @Arwi and Federal counsel Mohammad Sallehuddin Md Ali.
