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how does ratio decidendi work within the courts
Diagram 1.1 Hierarchy of Court StructureFrom the question, we have been told that there are similar materials facts to one decided by the Court of Appeal in year 2009. In year 2010, similar case occurs and Mr. Justice Peter is the high court judge. Whether the decision made by the judges in Court of Appeal is bounded for Mr. Justice Peter in the higher court, we have to understand the principle of hierarchy of court structure and last but not least doctrine of judicial precedent.
According to the diagram 1.1, we roughly understand about the hierarchy of court structure. The courts in Malaysia are divided into two divisions which are superior court and subordinate court. Obviously, the superior courts are the higher court and subordinate courts are the lower court in the structure. Since both of the cases in the question are occurred in the superior court, then we just briefly explain the function of each court in the superior courts. Inside the superior court, there are 3 courts which are federal court as the highest court, court of appeal as second highest court, high court in Malaya and high court in Sabah and Sarawak as third highest court.
Federal court is the highest court in Malaysia which has the highest power of judicial authorities among all the courts. It was established according to the Article 121(2) of the Federal Constitution and governed by the Courts of Judicature Act 1964. Federal Court judges also known as Chief Justices which are appointed by the Yang Dipertuan Agong acting on the advice of the Prime Minister. The current President of Federal Court is Justice Dato’ Abdul Hamid Mohammad. Special Court was established according to Art 182 Federal Constitution to catch up all the criminal and civil action instituted by or against on the Yang Dipertuan Agong or any of the State Rulers. According Article 183 Federal Constitution, no criminal and civil action can be instituted by or against Yang Dipertuan Agong or State Rulers without the consent of Attorney General. This Court are chaired by the Chief Justice of the Federal Court and assisted by four other member which are two Chief Judges of the respective High Court and two other persons appointed by the Conference of Rulers.
Court of Appeal is the final court of appeal from the decision of the High court. According to the Article 131(1B), Court of appeal is to hear the criminal and civil appeals from the high court. The judges here we call it Lord President which currently held by Justice Tan Sri Dato’ Zaki bin Tun Azmi.
High Court is the court that has both original jurisdiction and appellate jurisdiction. Original jurisdiction means the case started at high court for first time. Appellate jurisdiction means the high court can hear and determine the decision from the lower courts to judge the case. High court handles both criminal case and civil cases involving large sums of money whereas low sums of money will be handled by those lower courts.
Under High Court, there are 2 types of High Court which are High Court in Malaya and High Court in Sabah and Sarawak. High Court Malaya consists of Chief Judge and forty-Seven judges whereas High Court in Sarawak and Sabah consists of Chief Judge and 10 judges. It can be referred to Articles 121(1) and 122AA (1) of the Federal Constitution. The current Chief Judge of Malaya is Justice Dato’ Alauddin Mohammad Sheriff while Justice Tan Sri Richard Malanjum is the Chief Judge for Sarawak and Sabah.
Based on the question and the information we have, we have known that Mr. Justice Peter is from high court which the position of the court is lower than the Court of Appeal in the hierarchy of court of structure in Malaysia.
After the hierarchy structure, we must understand the term of Judicial precedent which is an important system adopted by judges where the judges must follow previous decisions. Under theory of doctrine of judicial precedent, decisions made by judges previously are binding upon future cases depending on the position of court in the hierarchy of the court with the conditions that the legal principle and facts are similar. For an example, if the Court of Appeal had made a decision on a certain case and there is a similar case occurred in the future and judged in the lower court. The lower court is bound to the decision made by the Court of Appeal. Judicial precedent is not created by Parliament but is created by judges. What it means? The applicable decision made by the judges is called as precedent. When there is a situation where there is no precedent to follow, judge have to set a new precedent, merely making new law according to justice, equity and good conscience. In this case, judge is making a new law and we call it original precedent. For those judge merely applying an existing law, we call it declaratory precedent. Example, higher court is original precedent and lower court is declaratory precedent.
Example of cases applied are Balfour v Balfour  and Merrit v Merrit  . In the case Merrit v Merrit  CA, Mr. Merrit and Miss Merrit married, but the husband Miss Merrit went to live with another woman. Mr. Merrit agreed to pay Miss Merrit £40 a month and she was to pay off the mortgage. When it was paid off he would transfer the house into her sole ownership. The wife paid off the balance of the mortgage and the husband then reduced the £40 per month to £25 per month. Balfour v Balfour case held that a spouse could not sue the other spouse due to the principle of social or domestic agreements. Balfour case occurred in the past and the decision had been made. The Merrit case is bound to the decision made by the Balfour case because both cases are judged in the equal courts and the application of doctrine of judicial precedent.
From the theory of doctrine of judicial precedent, decision of the higher courts is binding on the lower courts or equal court and some courts are bound by their own decision (make new law). The system of binding precedent is called stare decisis. The vital binding elements in judicial precedent we call it as ratio decidendi. Ratio decidendi can be defined as “The point in a case which determines the judgment" or “The principles when there is a case established". An obiter dictum is the courts’ opinion which can be said as the remarks or observation made by the judges. It may consist of argument, illustration or analogy but it is not binding for judicial precedent although it may be correct statement for the law. However, there is an exception that the ratio decidendi can be overruled by making appeal to the higher courts if there is new principle applied on it. Donoghue V Stevenson  , a famous case to best describing the overruled concept. This case was mentioned about the duty of care where Donoghue sued Stevenson for negligence in manufacturing. A ginger beer was bought by Donoghue’s friend which was manufactured by defendant. Donoghue consumed some of the product and observed that there are decomposed remains of a snail flow into her glass when Donoghue’s friend added more ginger beer to her glass. Donoghue felt nervous shock and gastro-enteritis. Donoghue sued Defendant for negligence of duty of care. Donoghue made an appeal to House of Lord. Lord Atkin had made a conclusion that “is Stevenson owed Donoghue a duty of care?" by creating Neighbor principle to overruled the precedent from the previous case Heaven v Pender  .
In this case, we understand the principle of doctrine of judicial precedent and hierarchy of the court structure. Mr. Justice Peter as a judge from High Court which the position of the court is lower than the position of the Court of Appeal is bound by the decision made by the Court of Appeal due to the principle of doctrine of judicial precedent in the condition that there are similar material facts and principle applied in the similar
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