In Wong Chi Hung v Lo Wing Pun & Mai Jieping (t/a Fai Tat RMB Exchange) (2026) 29 HKCFAR 169, the Hong Kong Court of Final Appeal (CFA) delivered a landmark judgment on cross-border disputes and the defence of foreign illegality.
Background
The case involved an informal currency exchange agreement whereby the Plaintiff deposited money into a Mainland bank account controlled by the 2nd Defendant. The account was subsequently frozen by Mainland authorities, leaving the Plaintiff without the promised Hong Kong dollars.
The Plaintiff brought an unjust enrichment claim to recover the funds based on a total failure of consideration. The 2nd Defendant relied on the defence of foreign illegality. In a comprehensive judgment, DDJ Gary CC Lam (as he then was) allowed the Plaintiff’s claim against the 2nd Defendant. The 2nd Defendant then lodged an appeal to the Court of Appeal, where G Lam JA delivered a cogent and learned judgment. This was followed by the 2nd Defendant’s final appeal to the CFA.
The Court’s Decision
The CFA authoritatively held that an illegality defence does not automatically defeat an independent unjust enrichment claim. The CFA adopted the flexible “range of factors” approach, treating both the stultification objection and the juridical basis of restitution as relevant factors, weighing them alongside all other pertinent policy considerations (such as anti-windfall concerns) and the specific circumstances of the case, including the nature of the illegality and its centrality to the unjust enrichment claim.
DVC Legal Series
The CFA’s pivotal judgment has provided valuable guidance on the defence of illegality and broader issues concerning unjust enrichment claims, as demonstrated by subsequent judgments discussing the CFA’s insightful analysis.
These topical issues and the key takeaways will be explored in a talk on 5 November 2026 (as part of our DVC Legal Series) by Mr Joseph Wong and Mr Tommy Cheung, who appeared respectively as counsel for the Appellant (2nd Defendant) and the Respondent (Plaintiff).
Read the full judgment here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=179493&currpage=T
Mr Joseph Wong, instructed by S W Wong & Associates, for the Appellant (2nd Defendant)
Mr Tommy Cheung, instructed by Li, Kwok & Law, for the Respondent (Plaintiff)
